The Diagram Below Shows Two Budget Deficit Functions for a Hypothetical

question 15

Multiple Choice

The diagram below shows two budget deficit functions for a hypothetical economy.
FIGURE 32- 2
-Refer to Figure 32- 2. Initially, suppose the economy is at point A. If the level of potential output were 400, the cyclically adjusted budget deficit would be

• A)- $10 million.
• B)$0.
• C)$4 million.
• D)negative.
• E)$14 million.

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