Below Is Some Information About the State of the Budget

question 147

Multiple Choice

Below is some information about the state of the budget and the economy.
1.A budget deficit and a recessionary gap.
2.A budget deficit and an inflationary gap.
3.A budget surplus and a recessionary gap.
4.A budget surplus and an inflationary gap.
-Refer to the information above to answer this question.When would a balanced-budget fiscal policy be pro-cyclical?

• A)1 only.
• B)1 and 4.
• C)2 only.
• D)2 and 3.