Suppose the government surplus is currently .5 percent of real GDP and the structural surplus is 1.5 percent.
(A)Is real GDP currently above or below potential GDP? Draw a diagram showing this situation.
(B)In your diagram,show the situation in which real GDP increases.What happens to the cyclical surplus?

Question

Suppose the government surplus is currently .5 percent of real GDP and the structural surplus is 1.5 percent.
(A)Is real GDP currently above or below potential GDP? Draw a diagram showing this situation.
(B)In your diagram,show the situation in which real GDP   increases.What happens to the cyclical surplus?

Quizplus · Accepted Answer

The Answer of Suppose the government surplus is currently .5 percent of real GDP and the structural surplus is 1.5 percent.
(A)Is real GDP currently above or below potential GDP? Draw a diagram showing this situation.
(B)In your diagram,show the situation in which real GDP   increases.What happens to the cyclical surplus?

Suppose the Government Surplus Is Currently