Use the Figure Below to Answer the Following Questions

question 59

Multiple Choice

Use the figure below to answer the following questions.
Figure 13.3.1
-Refer to Figure 13.3.1, which shows the outlays and revenues for the government of Pianoland.If potential GDP is $750 billion, and actual real GDP is $650 billion, the cyclical deficit is

• A)equal to the structural deficit.
• B)$180 billion.
• C)$60 billion.
• D)$40 billion.
• E)zero.

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Definitions:

Inferior Good

A category of product that sees reduced demand as the income levels of buyers rise.

Normal Good

A normal good is one for which demand increases as the income of consumers increases.

Optimal Consumption

The consumption mix that provides the highest satisfaction or utility level to an individual, given their income and prices.

Indifference Curve

A graphical representation of different bundles of goods between which a consumer is indifferent, showing levels of utility.