-Refer to the above figure. A budget deficit occurs when real national income is
A) Y1.
B) Y2.
C) Y3.
D) None of the above: cannot be determined given the information.

Name: -Refer to the above figure. A budget deficit occurs when real national income is A) Y1. B) Y2. C) Y3. D) None of the above: cannot be determined given the information.
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Question

-Refer to the above figure. A budget deficit occurs when real national income is
A) Y1. 
B) Y2. 
C) Y3. 
D) None of the above: cannot be determined given the information.

Quizplus · Accepted Answer

A budget deficit occurs when government spending exceeds tax revenue. At Y1, government spending is greater than tax revenue, so there is a budget deficit.

-Refer to the Above Figure