The Diagram Below Shows the Budget Deficit Function for a Hypothetical

question 77

Multiple Choice

The diagram below shows the budget deficit function for a hypothetical economy.
FIGURE 32- 1
-Refer to Figure 32- 1. Initially, suppose that 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 decreasing lump- sum taxes, then

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

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Definitions:

Power of Capital

The influence or control exercised by those who own capital or assets, especially in economic or workplace contexts.

Exclusive Representation

Refers to the rights of a duly selected union to be the sole representative of all employees in a bargaining unit, negotiating on their behalf.

Company-Dominated Unions

Labor organizations that are controlled or heavily influenced by the employer, rather than being an independent body representing workers' interests.

Wagner Act

A foundational piece of U.S. legislation, formally known as the National Labor Relations Act of 1935, which established the legal right for workers to form unions and engage in collective bargaining.