Vietnam Targets 7% GDP Growth This Year

Vietnam is aiming for economic growth of 7% this year compared to 2.58% last year, Nguyen Chi Dung, the country’s planning and investment minister said. Dung also reported that Vietnam’s budget was in surplus.—asia.nikkei.com

Answer the following questions to check your understanding of the story.

1) Why does Vietnam have a government budget surplus?

Vietnam has a government budget surplus because ______________.

a) the sum of personal and corporate income taxes exceed government expenditure on goods and services

b) personal income taxes exceed transfer payments

c) government receipts exceed the sum of government expenditure on goods and services and debt interest

d) government receipts exceed government outlays

2) Why does Vietnam’s government budget surplus lead to economic growth?

Vietnam’s government budget surplus ______________, which leads to economic growth.

a) decreases the demand for loanable funds, lowers the real interest rate, and decreases private investment

b) increases the supply of loanable funds, lowers the real interest rate, and decreases private investment

c) increases the supply of loanable funds, lowers the real interest rate, and increases private investment

d) decreases the supply of loanable funds, raises the real interest rate, and increases private saving

Vietnam Targets 7% GDP Growth This Year

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