Suppose potential income is $60 billion, actual income is $40 billion, and expenditures don't vary with income. If the actual budget deficit is $4 billion and the marginal tax rate is 20 percent, the cyclical deficit:
A) is zero.
B) is between zero and $4 billion.
C) is $4 billion.
D) cannot be determined from the given information.
Correct Answer:
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