If the budget deficit of a government is $50 billion and it plans to reduce it b

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Question: If the budget deficit of a government is $50 billion and it plans to reduce it by 20% next year, what will be the new budget deficit?

Options:

Correct Answer: $40 billion

Solution:

New budget deficit = 50 billion * (1 - 0.20) = 50 billion * 0.80 = $40 billion.

If the budget deficit of a government is $50 billion and it plans to reduce it by 20% next year, what will be the new budget deficit?

If the budget deficit of a government is $50 billion and it plans to reduce it by 20% next year, what will be the new budget deficit?

Step 1: Identify the current budget deficit, which is $50 billion.
Step 2: Determine the percentage reduction planned, which is 20%.
Step 3: Convert the percentage reduction into a decimal by dividing by 100. So, 20% becomes 0.20.
Step 4: Calculate the amount to be reduced from the budget deficit by multiplying the current deficit by the decimal: 50 billion * 0.20 = $10 billion.
Step 5: Subtract the reduction amount from the current budget deficit: 50 billion - 10 billion = $40 billion.
Step 6: The new budget deficit after the reduction will be $40 billion.

Budget Deficit Calculation – Understanding how to calculate a new budget deficit based on a percentage reduction.