When the U.S. economy reached full employment in 2007, the cyclically-adjusted deficit that year was -1.3% of GDP. From this information, we know that the:
A) Actual budget deficit must have been very close to 0% of GDP
B) Government implemented a contractionary fiscal policy that year
C) Actual budget deficit must have been very close to -1.3% of GDP
D) Government implemented a more expansionary fiscal policy from 2006 to 2007
Correct Answer:
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