In Comparing the Changes in Actual Budget Surplus and the Structural

question 163

Multiple Choice

In comparing the changes in actual budget surplus and the structural surplus between 1993 and 1999, it is clear that the

• A)actual surplus rose less than the structural surplus.
• B)actual surplus and the structural surplus rose about the same.
• C)actual surplus rose much more than the structural surplus.
• D)tax increases of 1993 decreased the structural surplus more than they decreased the actual surplus.

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Definitions:

Multiplier

A factor by which an initial change in spending will alter total economic output by a greater amount.

Multiplier Effect

The proportionate increase in final income that results from an injection of spending (initial increase in spending), typically influencing the level of national income and output.

Government Builds

Refer to initiatives or infrastructure projects undertaken by a government to develop or enhance the country's physical assets and services.

Water-treatment Plant

A facility that processes water to remove contaminants and make it safe for drinking and other uses.