The Diagram Below Shows Two Budget Deficit Functions for a Hypothetical

question 47

Multiple Choice

The diagram below shows two budget deficit functions for a hypothetical economy. FIGURE 31-2 Refer to Figure 31-2.Initially,suppose real GDP is $100 million and the budget deficit is $14 million,as shown by point A.Which of the following events could result in a move from point A to point C?

• A)a fiscal expansion and an increase in GDP
• B)a fiscal contraction and an increase in GDP
• C)a fiscal expansion and a decrease in GDP
• D)a fiscal contraction and a decrease in GDP
• E)an increase in GDP with no change in fiscal policy

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Definitions:

Robber's Cave Study

An experiment on intergroup conflict and cooperation conducted by Muzafer Sherif, illustrating how competition can lead to hostility and how cooperative goals can reduce intergroup conflict.

Prejudice

A preconceived opinion or bias against an individual or group without sufficient knowledge, reason, or experience.

Stereotypes

Preconceived and oversimplified ideas or images about certain groups of people, often based on race, gender, or other characteristics, that may lead to biased judgments.

Poverty

A socioeconomic condition characterized by a lack of financial resources and access to basic needs, such as food, water, education, and healthcare.