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Suppose That the Economy Is in Equilibrium, with a Trade

Question 109

Multiple Choice

Suppose that the economy is in equilibrium, with a trade deficit and with saving greater than investment.According to the circular-flow model, what is the state of the government's budget?  


A)  It is in deficit. 
B)  It is in surplus. 
C)  It is balanced. 
D)  It is zero.

Correct Answer:

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