O $ 100 200 300 400 500 600 700 800 900GDPRefer to the diagram, in which Tis tax revenues and G is government expenditures. All figures are in billions of dol ars. If the full-employment GDP is $400billion while the actual GDP is $200 billion: (Show your calculations)a What is the actual budget deficit?b. What is the cyclically adjusted budget deficit?c. The value of cyclically adjusted deficit identifies which type of discretionary fiscal policy T.G ($)100T806040200 $ 100 200 300 400 500 600 700 800 900GDP

Budget deficit = G-T at full employment level of $400 billion G=60 billion and T=40 billion 1.…

diagram, in which Tis tax revenues and G is government expenditures. All figures are in billions of dol ars. If the full-employment he actual GDP is $200 billion: (Show your calculations) the actual budget deficit?

diagram, in which Tis tax revenues and G is government expenditures. All figures are in billions of dol ars. If the full-employment he actual GDP is $200 billion: (Show your calculations) the actual budget deficit?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

O $ 100 200 300 400 500 600 700 800 900
GDP
Refer to the diagram, in which Tis tax revenues and G is government expenditures. All figures are in billions of dol ars. If the full-employment GDP is $400
billion while the actual GDP is $200 billion: (Show your calculations)
a What is the actual budget deficit?
b. What is the cyclically adjusted budget deficit?
c. The value of cyclically adjusted deficit identifies which type of discretionary fiscal policy

T.G ($)
100
T
80
60
40
20
0 $ 100 200 300 400 500 600 700 800 900
GDP

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