In Year 1, the Full-Employment Budget Showed a Deficit of $100

question 36

Essay

In Year 1, the full-employment budget showed a deficit of $100 billion and the actual budget showed a deficit of $125 billion.In Year 2, the full employment budget showed a deficit of $100 billion and the actual budget showed a deficit of $150 billion.Based on the data, what can be concluded about the direction of fiscal policy and the performance of the economy between Years 1 and 2?

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Definitions:

Accounts Payable

Short-term debts or obligations a company owes to its suppliers or creditors for goods and services received.

Sales Returns and Allowances

Deductions from a company's sales revenue that account for returned goods and discounts or allowances given to customers.

Purchase Discounts

Reductions in the purchase price of goods, services, or assets, usually offered as an incentive for prompt payment.

Sales Returns and Allowances

A reduction in sales revenue due to returned goods or allowances made for damaged or unsatisfactory products.