Use the Figure Below to Answer the Following Questions

question 89

Multiple Choice

Use the figure below to answer the following questions.

Figure 29.3.1
-Refer to Figure 29.3.1, which shows the outlays and revenues for the government of Pianoland. If real GDP equals $550 billion, the budget is

• A)in balance.
• B)a surplus of $60 billion.
• C)a surplus of $40 billion.
• D)a deficit of $60 billion.
• E)a deficit of $40 billion.

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Definitions:

Loanable Funds

The resources available for borrowing in the financial markets, influenced by savings, borrowing, and the government’s fiscal policies.

Demand For Loanable Funds

The desire to borrow money, driven by (among other factors) investments and the consumer desire for purchasing goods or services on credit.

Open-Economy Macroeconomic Model

A theoretical framework that analyzes the economy of a country in the context of its interactions with other countries, including trade, investment, and financial flows.

Supply Of Loanable Funds

The total amount of funds available for borrowing in the financial markets, determined by savings and the monetary policy.