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The following information applies to questions 1 - 4. Suppose we have the following information for the simple (fixed r, fixed P, fixed W) Keynesian
The following information applies to questions 1 - 4. Suppose we have the following information for the simple (fixed r, fixed P, fixed W) Keynesian model. C = 500 + 0.75 YD I = 310 G = 140 = 500 + 0.75 (Y - T) T = 200, where C is the consumption function, (Y - T) is disposable income, I is investment, G is government spending, and T is taxes. 1. What can you say about the government's budget situation? (Hint: Think about what "G" and "T" stand for.) Group of answer choices The budget is balanced. There is a budget surplus. We cannot say anything about the government budget. There is a budget deficit. None of the other options
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