In Year 1, the Full-Employment Budget Showed a Deficit of $100

question 24

Essay

In Year 1, the full-employment budget showed a deficit of $100 billion and the actual budget showed a deficit of $150 billion.In Year 2, the full employment budget showed a deficit of $75 billion and the actual budget showed a deficit of $100 billion.Based on the data, what can be concluded about the direction of fiscal policy and the performance of the economy between Years 1 and 2?

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Definitions:

Strategic Plan

A document outlining an organization's direction, priorities, and actions to achieve its goals.

Productivity Growth

An increase in the efficiency of production, often measured by the ratio of output to input over a specified period of time.

Economies Of Scale

The cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.

Skilled Labour

Labor that requires specialized training, knowledge, and abilities, often distinguished from unskilled or semiskilled labor in the context of workforce and employment.