Question

Lilliput is a country that has closed borders and does not import or export any goods or services; hence, they do not worry about trade with other countries. Total spending for the federal government of Lilliput for the last fiscal year was $24.19 billion. The country collected $22.9 billion in taxes during this same fiscal year. Assume government transfers were zero. Based on this information, what is Lilliput's budget balance? Enter your answer to two decimal places. budget balance: $ −1.29 billion In the last fiscal year, Lilliput was running a budget surplus a budget deficit a balanced budget

Answer 1

Answer:

The budget balance is -$1.29 billion.In the last fiscal year, Lilliput was running a budget deficit of $1.29 billion.

Explanation:

The budget balance of a country can be used to determine weather the country is running a budget surplus or deficit. This can be expressed as;

B=R-E

where;

B=budget balance

R=total revenue in the form of taxes

E=expenditure

In our case;

B=unknown

R=$22.9 billion

E=$24.19 billion

replacing;

B=22.9-24.19=-$1.29

The budget balance is -$1.29 billion.In the last fiscal year, Lilliput was running a budget deficit of $1.29 billion.