1. Use the graph below to answer the following questions: BB (Go fo) BB, (G₁.) 4700 5000 5300 Real Income (Y) a. In the figure above, if the budget line is BB0 and the natural real GDP is $5300, what is the structural surplus or deficit? b. In the figure above, if the budget line is BB0 and the natural real GDP is $5300, what is the cyclical surplus or deficit? c. In the figure above, if the budget line BB1, the natural real GDP is $5300, and actual real GDP is $5000, what is the cyclical budget surplus or deficit? d. In the figure above, if the budget line BB1, the natural real GDP is $5300, and actual real GDP is $5000, what is the structural budget surplus or deficit?

1. Use the graph below to answer the following questions: BB (Go fo) BB, (G₁.) 4700 5000 5300 Real Income (Y) a. In the figure above, if the budget line is BB0 and the natural real GDP is $5300, what is the structural surplus or deficit? b. In the figure above, if the budget line is BB0 and the natural real GDP is $5300, what is the cyclical surplus or deficit? c. In the figure above, if the budget line BB1, the natural real GDP is $5300, and actual real GDP is $5000, what is the cyclical budget surplus or deficit? d. In the figure above, if the budget line BB1, the natural real GDP is $5300, and actual real GDP is $5000, what is the structural budget surplus or 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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Step 1: Define Budget deficit

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Step 3: Determine cyclical budget deficit

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Step 4: Determine cyclical deficit

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