There Is an Inverse Relationship Between the Budget Deficit and Real

question 21

Multiple Choice

There is an inverse relationship between the budget deficit and real GDP because

• A)of adjustments in inflation.
• B)of the inverse relationship between interest payments on the debt and real GDP.
• C)as real GDP increases, tax revenue increases and transfer payments decline.
• D)as real GDP declines, taxes increase and transfer programs decline.
• E)as real GDP increases, taxes decline and spending on transfer programs increases.

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