The Diagram Below Shows the Budget Deficit Function for a Hypothetical

question 44

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

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

---

Definitions:

Newly Created Stoma

A newly surgically created opening on the body surface to divert bodily functions, such as waste excretion or breathing.

Preterm Infant

An infant born before 37 completed weeks of gestation, often requiring specialized care due to underdeveloped organs and systems.

Neonatal Intensive Care Unit

A specialized department in a hospital that provides critical care for newborn infants with serious health issues.

Multiple Stomas

The presence of more than one surgically created opening in the body to allow for the passage of bodily waste.