Refer to the Diagram, Where T Is Tax Revenues and G

question 165

Multiple Choice

Refer to the diagram, where T is tax revenues and G is government expenditures. All figures are in billions of dollars. If the full-employment GDP is $400 billion, while the actual GDP is $200 billion, the

• A) actual budget deficit exceeds the cyclically adjusted budget deficit.
• B) actual budget deficit is less than the cyclically adjusted budget deficit.
• C) cyclically adjusted deficit exceeds the cyclical deficit.
• D) cyclical deficit exceeds the cyclically adjusted deficit.

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