In an economy the volume of GDP is 12.000 units. The rate of VAT is 20 %. The 40 % of the

GDP is produced by capital while the remaining 60 % is produced by labour force. The tax

system looks as follows:

- There is no social benefit contribution.

- The rate of personal income tax is 25 %.

- The rate of corporate income tax is 20 %.

a) What is the amount of revenue the government might expect?

b) Assume that the government expenditures and transfers works out at 30 % of GDP, the

interest payments of state debt is 800 units. How much will be the volume of the total

balance and the primary balance of the government budget?