Answer the question using the following budget information f

Answer the question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Refer to the data. The budget deficit in year 4 is: Government Tax Spending Revenues Year 2 Year 3 Year 4 Year 5 ar 6 Year 1 $450 $425 $2000 450 3,000 500 4,000 600 5,000 580 4,800 500 600 680 O $620 billion. O $4.380 billion. O $5,620 billion. O $20 billion.

Solution

The budget deficit in year 4

= government expenditure in year 4 - tax revenue in year 4

=620-600

=$20 billion

Hence option four is the correct answer.

Option fourth ; $20 billion