In Year 1, the Actual Budget Deficit Was $150 Billion

question 98

Multiple Choice

In Year 1, the actual budget deficit was $150 billion and the cyclically-adjusted deficit was $125 billion. In Year 2, the actual budget deficit was $130 billion and the cyclically-adjusted deficit was $125 billion. It can be concluded that from Year 1 to Year 2:

• A) Real GDP decreased
• B) Real GDP increased
• C) Full employment was attained
• D) Fiscal policy became less expansionary

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