The Diagram Below Shows Two Budget Deficit Functions for a Hypothetical

question 25

Multiple Choice

The diagram below shows two budget deficit functions for a hypothetical economy. FIGURE 31-2 Refer to Figure 31-2.Initially,suppose the economy is at point A.If the government were to then implement a fiscal expansion,the structural budget deficit would be

• A)$4 million.
• B)$6 million.
• C)$7 million.
• D)$10 million.
• E)Insufficient information to know.