If the Cyclically Adjusted Budget Deficit Goes from 2 Percent

question 162

True/False

If the cyclically adjusted budget deficit goes from 2 percent to 1 percent of GDP, then it indicates that
fiscal policy has turned more contractionary.

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Definitions:

Perfectly Inelastic

A market condition where the quantity demanded or supplied does not change despite changes in price.

Demand Curve

The demand curve is a graphical representation that displays the relationship between the price of a good or service and the quantity demanded by consumers at varying price levels.

Unitary Elasticity

A situation in which the quantity demanded or supplied of a good changes by the same percentage as the change in price.

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period, typically showing a downward slope.