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-Refer to the Above Diagram

Question 28

Multiple Choice

   -Refer to the above diagram. Assume that G and T<sub>1</sub> are the relevant curves and that the economy is currently at B, which is its full-employment GDP. This economy has a: A)  cyclically adjusted budget surplus only. B)  cyclically adjusted budget deficit only. C)  cyclically adjusted budget surplus and an actual budget surplus. D)  cyclically adjusted deficit and an actual budget deficit.
-Refer to the above diagram. Assume that G and T1 are the relevant curves and that the economy is currently at B, which is its full-employment GDP. This economy has a:


A) cyclically adjusted budget surplus only.
B) cyclically adjusted budget deficit only.
C) cyclically adjusted budget surplus and an actual budget surplus.
D) cyclically adjusted deficit and an actual budget deficit.

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