An Increase in the Structural Deficit Most Likely Reflects the Fact

question 43

Multiple Choice

An increase in the structural deficit most likely reflects the fact that fiscal policy is

• A) having little or no impact on the economy.
• B) effectively reducing the size of the national debt.
• C) becoming more expansionary.
• D) creating a substantial gap between potential and full-employment GDP.
• E) causing the price level to fall.