Consider the Government's Budget Deficit Function,graphed with the Budget Deficit

question 3

Multiple Choice

Consider the government's budget deficit function,graphed with the budget deficit on the vertical axis and real GDP on the horizontal axis.The vertical position (or height) of the budget deficit function is determined by

• A)the government's fiscal policies.
• B)nominal GDP.
• C)the interest rate times taxes.
• D)the purchase and sale of government securities on the open market.
• E)the stock of government debt minus government spending.

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