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Econo Nation started 2008 with no national budget debt or surplus. By the end of 2008, it had a budget surplus of $304 million; in 2009, it had a budget deficit of $452 million; in 2010, it had a budget surplus of $109 million, and the amount of its budget deficit or surplus in 2011 is unknown. If at the end of 2011 Econo Nation’s national debt totaled $50 million, determine the deficit or surplus in 2011.

Answer :

Answer:

The deficit in 2011 is $11 million

Explanation:

For computing the deficit or surplus, first we have to find out the national budget debt or surplus which is shown below:

= Budget surplus in 2008 + budget deficit in 2009 + budget surplus in 2010

= $304 million - $452 million + $109 million

= - $39 million

And, the national debt is $50 million

So, the deficit would be equal to

= National budget debt + national debt

= -$39 million + $50 million

= - $11 million

There is budget deficit in 2011 i.e. $11 million.

What is a budget?

Budget is the financial plan which helps to determine the total revenue and expenditure for a future period of time.it can be used by the governments, individuals or businesses.

  • Budget surplus when export(sales)/ revenue is more than the import(purchase)/expenditure.
  • Budget deficit when import(purchase)/expenditure is more than the export(sales)/revenue.
  • Given:
  • Budget surplus in 2008=  $304 million
  • Budget Deficit in 2009=    ($452 million)
  • Budget surplus in 2010=    $109 million

Total national surplus =   $39 million (add all the above)

  • National debt in 2011= $50 millions

So, the deficit would be equal to

= National budget surplus + national debt

= $39 million +($50 million)

= ($11 million)

Note: the figures in brackets means they are in negative.

Therefore, in 2011 there is deficit of ($11 millions).

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