-The figure above shows tax revenues and government expenditures in the economy of Meadowlake. Potential GDP is $18 trillion. If real GDP is $18 trillion, then the government has a

Question

Quizplus · Accepted Answer

When real GDP equals potential GDP, as is the case here with both being $18 trillion, it means the economy is operating at its full capacity without any cyclical fluctuations. Therefore, the government's budget situation reflects its structural stance rather than being influenced by the economic cycle, leading to a balanced budget scenario.

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