In 2010 in the country of Arlandia goverment debt was zero. You know that the go

Question

In 2010 in the country of Arlandia goverment debt was zero. You know that the government revenue for 2011 was $344, for 2012 was $360, for 2013 was $380. The government outlays for 2011 were $197 and for 2012 were $237. If you know that goverment debt for 2013 was $2,161, what are government outlays for 2013?

In 2010 in the country of Arlandia goverment debt was zero. You know that the government revenue for 2011 was $344, for 2012 was $360, for 2013 was $380. The government outlays for 2011 were $197 and for 2012 were $237. If you know that goverment debt for 2013 was $2,161, what are government outlays for 2013?

Explanation / Answer

Year 2011 deficit/ surplus = revenue - outlay = 344-197 = $147 (surplus)

Year 2012 deficit/ surplus = revenue - outlay = 360-237 = $123 (surplus)

Year 2013 outlay = surplus of 2011 + surplus of 2012+ debt of 2013+ revenues

= 147+ 123 + 2,161+ 380 = $2,811

The company had surplus of 2011 and 2012, it means all the debt raised by the company in 2013 is to fund the budget deficit and some part of the budget deficit will be funded by the surplus of 2011 and 2012. So in the year 2013, we have added surplus of previous two year, then added the debt and then revenues to calculate the outlay.

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