The diagram below shows two budget deficit functions for a hypothetical economy. Budget Deficit (millions of dollars) 14 7.5 Real GDP (millions of dollars) 100 200 300 400 500 600 700 Budget Surplus (millions of dollars) Bo FIGURE 31-2 FIGURE 31-2 Refer to Figure 31-2. Initially, suppose real GDP is $100 million and the budget deficit is $14 million, as shown by point A. Which of the following events could result in a move from point A to point C? A) a fiscal contraction and a decrease in GDP

The diagram below shows two budget deficit functions for a hypothetical economy. Budget Deficit (millions of dollars) 14 7.5 Real GDP (millions of dollars) 100 200 300 400 500 600 700 Budget Surplus (millions of dollars) Bo FIGURE 31-2 FIGURE 31-2 Refer to Figure 31-2. Initially, suppose real GDP is $100 million and the budget deficit is $14 million, as shown by point A. Which of the following events could result in a move from point A to point C? A) a fiscal contraction and a decrease in GDP

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section11.B: Algebraic Treatment Of Taxes And Fiscal Policy

Problem 3TY

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