The diagram below shows two budget deficit functions for a hypothetical economy.
FIGURE 31-2 Refer to Figure 31-2.Initially,suppose the economy is at point A.If the government were to then implement a fiscal expansion,the structural budget deficit would be
A) $4 million.
B) $6 million.
C) $7 million.
D) $10 million.
E) Insufficient information to know.
Correct Answer:
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