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Assume That the Actual Deficit Is $150 Billion with the Economy

Question 10

Multiple Choice

Assume that the actual deficit is $150 billion with the economy well below potential output and that the level of economic activity rose to its potential level while tax revenues increased by $50 billion and transfer payments fell by $20 billion.Then,what is the structural deficit?


A) $180 billion
B) $120 billion
C) $220 billion
D) $80 billion
E) $100 billion

Correct Answer:

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