-Refer to the above diagram where T is tax revenues and G is government expenditures.All figures are in billions of dollars.If the full-employment GDP is $400 billion while the actual GDP is $200 billion,the:

Question

Quizplus · Accepted Answer

The actual budget deficit exceeds the full-employment deficit because the actual GDP is below the full-employment GDP, leading to lower tax revenues and higher deficits.

-Refer to the Above Diagram Where T Is Tax Revenues