In an economy the volume of GDP is 12.000 units. The rate of VAT is 20 %. The 40 % of the
GDP is produced by capital while the remaining 60 % is produced by labour force. The tax
system looks as follows:
- There is no social benefit contribution.
- The rate of personal income tax is 25 %.
- The rate of corporate income tax is 20 %.
a) What is the amount of revenue the government might expect?
b) Assume that the government expenditures and transfers works out at 30 % of GDP, the
interest payments of state debt is 800 units. How much will be the volume of the total
balance and the primary balance of the government budget?
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