-The figure above shows tax revenues and government expenditures in the economy of Meadowlake. Potential GDP is $12 trillion. If real GDP is $8 trillion, then the government has a
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Question

Quizplus · Accepted Answer

When real GDP is below potential GDP, the economy is likely experiencing a cyclical deficit due to lower tax revenues and higher government spending related to economic downturns.

-The Figure Above Shows Tax Revenues and Government Expenditures in the Economy