The diagram below shows the budget deficit function for a government in a hypothetical economy.
FIGURE 31-1 Refer to Figure 31-1.Initially,suppose real GDP is $100 million and the budget deficit is $4 million,as shown by point A on the graph.Which of the following is consistent with a move from point A to point B?
A) implementation of an expansionary fiscal policy
B) implementation of a contractionary fiscal policy
C) implementation of a contractionary monetary policy
D) the economy entering into a recession
E) the economy entering into a boom
Correct Answer:
Verified
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