in one economy government spending is 1000. Taxes is 1500. Loan installment is 600. How much is the surplus and the primary surplus?

 in one economy government spending is 1000. Taxes is 1500. Loan installment is 600. How much is the surplus and the primary surplus?

The surplus of an economy is the difference between its total revenue (taxes and other sources of income) and total expenditure (government spending and interest payments on outstanding debt). The primary surplus, on the other hand, is the difference between total revenue and total expenditure, excluding interest payments on outstanding debt.

Using the figures provided in the question:

Total revenue = Taxes = 1500 Total expenditure = Government spending + Loan installment = 1000 + 600 = 1600 Interest payments on outstanding debt = Loan installment = 600

Therefore: Surplus = Total revenue - Total expenditure = 1500 - 1600 = -100 Primary surplus = Total revenue - (Total expenditure - Interest payments on outstanding debt) = 1500 - (1600 - 600) = 500

So, in this economy, there is a deficit of 100, and a primary surplus of 500.