-Economic data for a mythical economy in the years 2006 -2010 are summarized in the figure above. Assume that the spending formulas and tax schedules are identical for all years. When the economy is at full employment, the government has a
A) budget surplus.
B) procyclical policy.
C) balanced budget.
D) budget deficit.

Question

-Economic data for a mythical economy in the years 2006 -2010 are summarized in the figure above. Assume that the spending formulas and tax schedules are identical for all years. When the economy is at full employment, the government has a
A) budget surplus. 
B) procyclical policy. 
C) balanced budget. 
D) budget deficit.

Quizplus · Accepted Answer

When the economy is at full employment, the government typically aims for a balanced budget, where government spending equals tax revenue, assuming no changes in fiscal policy or tax schedules.

-Economic Data for a Mythical Economy in the Years 2006