The Diagram Below Shows the Budget Deficit Function for a Government

question 38

Multiple Choice

The diagram below shows the budget deficit function for a government in a hypothetical economy. FIGURE 31-1
-Refer to Figure 31-1.Initially,suppose real GDP is $100 million and the budget deficit is $4 million,as shown by point A on the graph.Which of the following is consistent with a move from point A to point B?

• A)implementation of an expansionary fiscal policy
• B)implementation of a contractionary fiscal policy
• C)implementation of a contractionary monetary policy
• D)the economy entering into a recession
• E)the economy entering into a boom

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Definitions:

Fetus

The developing human from roughly eight weeks after conception until birth, during which significant growth and development occur.

Stress

A physical, mental, or emotional factor that causes bodily or mental tension, which can come from any event or thought that makes one feel frustrated, angry, or nervous.

Mercury

A chemical element with symbol Hg and atomic number 80, known for being a heavy, silvery d-block element that is liquid at room temperature.

PCBs

Polychlorinated biphenyls, a class of highly toxic chemical compounds used in various industrial applications, now banned or restricted due to environmental and health risks.