Suppose that Halloween Island is totally
isolated from the rest of the world but has a thriving
market economy, complete with credit markets. Its
currency is the broomstick, abbreviated bs. In the past
year the government has collected 1000 bs as taxes, but
spent 1300 bs. Total savings of the nongovernmental
sector was 1300 bs. From these numbers, we can deduce
GDP was 3600 bs.
the rate of inflation was 300%.
the capital stock was decreasing.
investment was 1000 bs.