Suppose an Economy Is Operating Below Potential Real GDP and the Government

question 53

Multiple Choice

Suppose an economy is operating below Potential Real GDP and the government has a structural deficit equal to $100 billion.If the total government deficit is equal to $150 billion then the cyclical deficit is equal to:

• A)$150 billion.
• B)$250 billion.
• C)$50 billion.
• D)$100 billion.

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Definitions:

Heuristics

Heuristics are mental shortcuts or rules of thumb that simplify decision making, often at the cost of accuracy or completeness.

Algorithms

Step-by-step procedures or formulas for solving problems or performing tasks.

Mnemonic Devices

Techniques used to help remember information, often through associations, patterns, or acronyms, facilitating easier retrieval from memory.

Algorithms

Step-by-step procedures or formulas for solving problems or completing tasks.