Question

The tables show the spending and revenue for Littleland in 2010. Use the tables and other information to answer the questions. Spending category Value (millions) education $320 welfare and Social Security $890 health care $270 defense $120 payments on debt $170* other $240 *This payment covers total interest owed only. Revenue category Value (millions) income tax $800 sales tax $270 corporate tax $300 social insurance $340 GDP in 2010: $7.3 billion Total debt as of 2009: $3.5 billion How much money (in millions) did Littleland need to borrow in 2010 to finance its government spending

Answer 1

$300 million

Explanation:

The computation of debt is shown below:-

But before that we need to determine the following amounts

Total Expenditure = Spending on Education + Spending on Welfare and social security + Spending on Healthcare + Spending on Defense + Payments on Debt + Other Spending

= $320 + $890 + $270 + $120 + $170 + $240

= $2,010 million

Total Revenue = Income Tax + Sales Tax + Corporate Tax + Social Insurance

= $800 + $270 + $300 + $340

= $1710 million

Debt or borrowed amount =Total expenditure - Total revenue

= $2,010 - $1,710

= $300 million