When Real GDP Equals Potential GDP of $12 Trillion, the Budget

question 53

Multiple Choice

When real GDP equals potential GDP of $12 trillion, the budget deficit is $1 trillion. Real GDP actually equals $14 trillion and the budget surplus is $3 trillion. The economy has a structural ________ and a cyclical ________.

• A)deficit of $1 trillion; surplus of $4 trillion
• B)deficit of $1 trillion; surplus of $2 trillion
• C)surplus of $4 trillion; deficit of $1 trillion
• D)surplus of $3 trillion; surplus of $2 trillion
• E)deficit of $4 trillion; surplus of $1 trillion

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