The Diagram Below Shows Two Budget Deficit Functions for a Hypothetical

question 86

Multiple Choice

The diagram below shows two budget deficit functions for a hypothetical economy. FIGURE 31-2
-Refer to Figure 31-2.Initially,suppose the economy is at point A on budget deficit function .Real GDP (Y) is $100 million.If the level of potential output (Y*) were $300 million,the structural budget deficit would be

• A)$2 million.
• B)$14 million.
• C)measured by the vertical distance between the horizontal axis and (at real GDP = 300).
• D)measured by the vertical distance between point A and the budget deficit that would exist at real GDP = 300 million.
• E)Insufficient information to know.

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Definitions:

Super-Ego

The strict and demanding part of the mind.

Ego

In psychoanalytic theory, it represents the part of the mind that mediates between the conscious and the unconscious and is responsible for reality testing and a sense of personal identity.

Unconscious Mind

Refers to the part of the mind that is not currently in focal awareness, containing thoughts, memories, and desires that are not readily accessible but influence behavior.

Pleasure Principle

A concept in psychoanalytic theory that describes the instinctual seeking of pleasure and avoiding of pain to satisfy biological and psychological needs.