The Diagram Below Shows the Budget Deficit Function for a Government

question 84

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 a contractionary fiscal policy by decreasing its purchases of goods and services,then

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

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Definitions:

Whiners

Individuals who frequently complain in a prolonged, often exaggerated manner about problems or situations.

Complainers

Individuals who express dissatisfaction or grievances frequently.

Arbitrary Approach

A method or decision-making process based on individual discretion or judgment rather than fixed standards or rules.

Democratic Vote

A voting method in which individuals express their choice or preference in a matter through a vote, often characterized by equality and fairness.