Consider the information provided below for the hypothetical country of Zeta Tax revenues = $2,000 Government purchases of goods and services = $1,500 Government transfers = $1,000 Real GDP = $20,000 Potential Output $18,000 a. Is the budget balance in Zeta positive or negative? i. What is the amount of the budget balance? b. What is currently in what phase of the business cycle? Explain. Is Zeta implementing the appropriate fiscal policy given the current state of the economy? Explain. How does Zeta's cyclically adjusted budget deficit compare with its actual budget deficit? Explain. С. d.

Consider the information provided below for the hypothetical country of Zeta Tax revenues = $2,000 Government purchases of goods and services = $1,500 Government transfers = $1,000 Real GDP = $20,000 Potential Output $18,000 a. Is the budget balance in Zeta positive or negative? i. What is the amount of the budget balance? b. What is currently in what phase of the business cycle? Explain. Is Zeta implementing the appropriate fiscal policy given the current state of the economy? Explain. How does Zeta's cyclically adjusted budget deficit compare with its actual budget deficit? Explain. С. d.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter20: Exchange Rates And The Macroeconomy

Section: Chapter Questions

Problem 3TY

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