Question

If a government collects $1,600 in tax revenue and spends $1,400, it has a:

a) Surplus of $200.
b) Balanced budget.
c) Deficit of $200.
d) Public debt of $200.

Answer 1

a) Surplus of $200. The government has a surplus of $200.

Step-by-step explanation:

In this case, the government collects $1,600 in tax revenue and spends $1,400. To determine the government's budget status, we need to compare the tax revenue and spending. Since the tax revenue is higher than the spending, the government has a surplus of $200. Therefore, the correct answer is a) Surplus of $200.