The Diagram Below Shows Two Budget Deficit Functions for a Hypothetical

question 120

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 on budget deficit function .Real GDP (Y) is $100 million.If the level of potential output (Y*) were $300 million,the structural budget deficit would be

• A)$4 million.
• B)$6.5 million.
• C)$7.5 million.
• D)$14 million.
• E)Insufficient information to know.

---

Definitions:

Strong

In the context of materials, it refers to the ability to withstand force or pressure without breaking or deforming.

Air Pressure

The force exerted by the weight of air on the Earth's surface, influencing weather patterns and conditions.

Altitude

The height or elevation of a point above a specific reference level, usually above sea level.

Explanatory

Pertaining to a variable in a statistical model that is used to explain or predict changes in a response variable.