If a government collects $200 billion in taxes and spends $250 billion, what is

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Question: If a government collects $200 billion in taxes and spends $250 billion, what is the budget deficit?

Options:

Correct Answer: $50 billion

Solution:

Budget Deficit = Government Spending - Tax Revenue = $250 billion - $200 billion = $50 billion.

If a government collects $200 billion in taxes and spends $250 billion, what is the budget deficit?

If a government collects $200 billion in taxes and spends $250 billion, what is the budget deficit?

Step 1: Identify the total amount of taxes collected by the government. In this case, it is $200 billion.
Step 2: Identify the total amount of money the government spends. In this case, it is $250 billion.
Step 3: Use the formula for budget deficit, which is: Budget Deficit = Government Spending - Tax Revenue.
Step 4: Plug in the numbers into the formula: Budget Deficit = $250 billion - $200 billion.
Step 5: Calculate the result: $250 billion - $200 billion = $50 billion.
Step 6: Conclude that the budget deficit is $50 billion.

Budget Deficit – The budget deficit is the difference between government spending and tax revenue, indicating how much more the government spends than it collects in taxes.