The Diagram Below Shows the Budget Deficit Function for a Government

question 21

Multiple Choice

The diagram below shows the budget deficit function for a government in a hypothetical economy. FIGURE 31-1
-Refer to Figure 31-1.Initially,suppose real GDP is $100 million and the budget deficit is $4 million,as shown by point A.If the government implements an expansionary fiscal policy by increasing its purchases of goods and services,then

• A)the budget deficit function would shift down.
• B)the budget deficit function would become steeper.
• C)the budget deficit function would become flatter.
• D)the budget deficit function would shift up.
• E)the size of the budget deficit would decrease as we move from point A to point B.

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Definitions:

Rehearsal

A cognitive process involving the conscious repetition of information to be remembered, facilitating its transfer to long-term memory.

Speed-reading

A collection of reading methods that increase the speed and efficiency of reading without greatly reducing comprehension or retention.

Imagination Inflation

The phenomenon where vividly imagining an event can increase confidence that it actually occurred.

Source Amnesia

A memory disorder where an individual is unable to remember the source of a specific memory while retaining the factual content.