Answering all questions compulsory... The accompanying diagram shows two budget deficit functions for a hypotheticaleconomy.Suppose the economy is at point A, the budget deficit function is Bo, and the levelof potential output is $500 million. The structural budget deficit would beA. $2 million.B. $7 million.C. - $5 million.D. $0.-C8-A6 5 4Budget Surplus/Deficit (millions of dollars)B0OC125250375 500 625 750 875B₁Real GDP (millions of dollars)Bo Consider the following data about government debt and deficit in a given year:― real interest rate on government bonds = 2%- growth rate of real GDP = 2%- current debt-to-GDP ratio = 28%- primary budget deficit as a percentage of GDP = 6%Over this one-year period the debt-to-GDP ratio will haveA. fallen by 6 percentage points.B. risen by 0.6 percentage points.C. remained unchanged.D. risen by 6 percentage points.E. fallen by 0.6 percentage points.

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The accompanying diagram shows two budget deficit functions for a hypothetical economy. Suppose the economy is at point A, the budget deficit function is Bo, and the level of potential output is $500 million. The structural budget deficit would be OA. $2 million. B. $7 million. C. - $5 million. OD. $0. - 8- Budget Surplus/Deficit (millions of dollars) & ÷ ÷ B C 125 250 375 500 625 750 875 В1 Real GDP (millions of dollars) Bo

The accompanying diagram shows two budget deficit functions for a hypothetical economy. Suppose the economy is at point A, the budget deficit function is Bo, and the level of potential output is $500 million. The structural budget deficit would be OA. $2 million. B. $7 million. C. - $5 million. OD. $0. - 8- Budget Surplus/Deficit (millions of dollars) & ÷ ÷ B C 125 250 375 500 625 750 875 В1 Real GDP (millions of dollars) Bo

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 51P: A government starts off with a total debt of $3.5 billion. In year one, the government runs a...

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