Figure 16-1

-In Figure 16-1,there are four levels of income.G is government expenditures and TT is taxes less transfers.At which level of income is the actual deficit the greatest?

Question

Figure 16-1
 
-In Figure 16-1,there are four levels of income.G is government expenditures and TT is taxes less transfers.At which level of income is the actual deficit the greatest?

Quizplus · Accepted Answer

At level Y1, the actual deficit is the greatest because the gap between government expenditures (G) and taxes less transfers (TT) is the largest compared to the other income levels. This is indicated by the largest distance between the G and TT lines in Figure 16-1 at level Y1.

Figure 16-1 -In Figure 16-1,there Are Four Levels of Income.G Is Government