When Current Government Expenditures Equal Current Tax Revenues and the Economy

question 217

Multiple Choice

When current government expenditures equal current tax revenues and the economy is achieving full employment,

• A) the cyclically adjusted budget has neither a deficit nor a surplus.
• B) the cyclically adjusted budget may have either a deficit or a surplus.
• C) fiscal policy is contractionary.
• D) nominal GDP and real GDP are equal.

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