Suppose That in Year 2 There Was a Higher Federal

question 74

Multiple Choice

Suppose that in Year 2 there was a higher federal budget deficit than in Year 1.This could be explained by ________ in Year 2.

• A)lower real interest rates
• B)higher real GDP (with fiscal policy constant)
• C)lower real GDP (with fiscal policy constant)
• D)lower government expenditure (with real GDP constant)
• E)a lower primary budget surplus

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