The Cyclically Adjusted Deficit as a Percentage of GDP Is

question 66

Multiple Choice

The cyclically adjusted deficit as a percentage of GDP is 2 percent in Year 1.This cyclically adjusted deficit becomes 1 percent of GDP in Year 2.It can be concluded that from Year 1 to Year 2,

• A)fiscal policy was more expansionary.
• B)fiscal policy was more contractionary.
• C)the Federal government is decreasing taxes.
• D)the Federal government is increasing spending.

---

Definitions:

Transferable

Capable of being passed on or conveyed from one person or entity to another.

Partnership Capital

When a partnership or limited liability partnership is formed, partners contribute cash or other property to the partnership.

Loans

A financial arrangement in which an entity lends money to another with the expectation it will be repaid, often with interest.

Limited Partner

An owner of a limited partnership who has no right to manage the business but who possesses liability limited to his capital contribution to the business.