Refer to the diagram, where T is tax revenues and G is government expenditures. All ﬁgures are in billions of dollars. If the full-employment and actual GDP are each $400 billion, government can balance
Its cyclically adjusted budget by
A) increasing T by $40 billion.
B) reducing G by $20 billion.
C) reducing T by $20 billion.
D) increasing T by $10 billion and reducing G by $20 billion.

Question

Refer to the diagram, where T is tax revenues and G is government expenditures. All ﬁgures are in billions of dollars. If the full-employment and actual GDP are each $400 billion, government can balance
Its cyclically adjusted budget by
A) increasing T by $40 billion. 
B) reducing G by $20 billion. 
C) reducing T by $20 billion. 
D) increasing T by $10 billion and reducing G by $20 billion.

Quizplus · Accepted Answer

The Answer of  Refer to the diagram, where T is tax revenues and G is government expenditures. All ﬁgures are in billions of dollars. If the full-employment and actual GDP are each $400 billion, government can balance
Its cyclically adjusted budget by
A) increasing T by $40 billion. 
B) reducing G by $20 billion. 
C) reducing T by $20 billion. 
D) increasing T by $10 billion and reducing G by $20 billion.

Refer to the Diagram, Where T Is Tax Revenues and G