re: #620 LynnfromNZ

Yes, that’s the only one I missed. I still don’t understand it.

33) If taxes equal government spending, then:
A. government debt is zero
B. printing money no longer causes inflation
C. government is not helping anybody
D. tax per person equals government spending per person
E. tax loopholes and special-interest spending are absent

Their answer (D) works like this.

A country has 100 people and raises $100 in tax revenue, so the average tax is $1 per person. The country then spends $100 for an average of $1 per person.

The answer A doesn’t make sense since debt is longer term. Deficit is spending more than income. Debt is long term like a loan and not necessarily bad, car, house, business loans.

C and E are plain silly.

D doesn’t hold up to examination since taxes aren’t collected or spent on an “average.”

The correct answer would be the government does not have a deficit, it’s income is equal to it’s spending.