An Economy Has Potential Output of 100,actual Output of 90

question 9

Multiple Choice

An economy has potential output of 100,actual output of 90 and tax revenue of 50.The current government deficit is zero,what is the structural deficit if the elasticity of revenue with respect to out is 0.5 whilst the elasticity of spending with respect to output is -0.25?

• A) 0
• B) -1
• C) -2
• D) -3
• E) -4

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Definitions:

Ogden And Richards

Refers to Charles Ogden and Ivor Richards, two scholars who contributed significantly to the field of semantics and the study of meaning in language.

Effective Apology

An acknowledgment of wrongdoing that is sincere, expresses regret, and seeks to make amends.

Sapir-Whorf Hypothesis

A theory in linguistic anthropology suggesting that the structure of a language influences its speakers' worldview or cognition.

Language Barrier

A communication obstacle that occurs when people who speak different languages are unable to understand each other's language.