The following is the data for a hypothetical island economy during a recent year. All values are in billions of real dollars. Assume that the island economy does not engage in trade with any other countries.
Gross Domestic Product $2,000
Net Taxes $400
Government Purchases $500
Planned Investment $300
Consumption $1,200
3.1. What is the status of the federal budget?
A. Surplus of $300 billion
B. Surplus of $100 billion
C. Deficit of $400 billion
D. Deficit of $100 billion
