Question

Which of the following equals the amount of public​ saving?
A. Government tax revenue minus the sum of government purchases and transfer payments to households.
B. The sum of government purchases and government tax​ revenue, minus transfer payments to households.
C. Government transfer payments to household minus the sum of government tax revenue and government purchases.
D. The sum of government tax​ revenue, government​ purchases, and government transfer payments to households.
A government that collects more in taxes than it spends experiences
A. a budget balance.
B. a budget surplus.
C. a budget deficit.
D. an increase in the national debt.

Answer 1

Answer:

The answers are:

• A) Government tax revenue minus the sum of government purchases and transfer payments to households.
• B) a budget surplus

Explanation:

The formula to calculate public saving is (T - G - TR).

• T stands for all the government revenue through taxes and tariffs.
• G stands for all the government spending including purchase of goods and provision of services.  
• TR stands for all the government transfers including payments to individuals and households through social programs (including social security).  

Budget surplus is the same as public saving.