The Cyclical Deficit

question 47

Multiple Choice

The cyclical deficit

• A)is a persistent economic phenomenon.
• B)occurs when the economy is at full employment.
• C)arises purely because real GDP does not equal potential GDP.
• D)is an accumulation of the government debt.
• E)none of the above.

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Definitions:

Circular Flow Model

Goods and services flow from business firms to households in exchange for consumer expenditures, while resources flow from households to business firms in exchange for resource payments.

Supply Products

The activity of making goods available to consumers, often involving manufacturing, distribution, and sale processes.

Demand Resources

The various inputs or factors that contribute to the demand side of the economy, influencing the quantity of goods and services demanded.

Sweden

A country in Northern Europe known for its high standard of living, comprehensive welfare system, and as a member of the European Union, but not using the euro as its currency.