Fill in the blanks to make the following statements correct. a. When there is no change in the government's fiscal policy, it is still possible for the budget deficit to fall because of changes in the level of economic activity b. For a given set of fiscal policies, the budget deficit decreases c. The structural budget deficit is the budget deficit that would exist if real GDP equalled potential GDP and the government's expenditure and taxation policies were unchanged d. During a recession, when Y is less than Y the actual budget deficit is greater than the structural budget deficit. During an inflationary boom, when Y is greater than Y, the actual budget deficit is less e. Suppose the real interest rate is 2.4 percent and the growth rate of real GDP is 2.9 percent. If the government wants to stabilize the debt-to-GDP ratio, then it is necessary to have a as real GDP rises and increases as real GDP falls. than the structural budget deficit. structural budget surplus primary budget deficit primary budget surplus structural budget deficit
Fill in the blanks to make the following statements correct. a. When there is no change in the government's fiscal policy, it is still possible for the budget deficit to fall because of changes in the level of economic activity b. For a given set of fiscal policies, the budget deficit decreases c. The structural budget deficit is the budget deficit that would exist if real GDP equalled potential GDP and the government's expenditure and taxation policies were unchanged d. During a recession, when Y is less than Y the actual budget deficit is greater than the structural budget deficit. During an inflationary boom, when Y is greater than Y, the actual budget deficit is less e. Suppose the real interest rate is 2.4 percent and the growth rate of real GDP is 2.9 percent. If the government wants to stabilize the debt-to-GDP ratio, then it is necessary to have a as real GDP rises and increases as real GDP falls. than the structural budget deficit. structural budget surplus primary budget deficit primary budget surplus structural budget deficit
Chapter17: Federal Deficits, Surpluses, And The National Debt
Section: Chapter Questions
Problem 7SQP
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![Fill in the blanks to make the following statements correct.
a. When there is no change in the government's fiscal policy, it is still possible for the budget deficit to fall because of changes in the level of economic activity
b. For a given set of fiscal policies, the budget deficit decreases
as real GDP rises and increases
c. The structural budget deficit is the budget deficit that would exist if real GDP equalled potential GDP
"
as real GDP falls.
and the government's expenditure and taxation policies were unchanged
*
*
d. During a recession, when Y is less than Y the actual budget deficit is greater than the structural budget deficit. During an inflationary boom, when Y is greater than Y the actual budget deficit is less than the structural budget deficit.
"
e. Suppose the real interest rate is 2.4 percent and the growth rate of real GDP is 2.9 percent. If the government wants to stabilize the debt-to-GDP ratio, then it is necessary to have a
structural budget surplus
primary budget deficit
primary budget surplus
structural budget deficit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F71508d4f-7186-4361-aa90-536b1b9115cf%2F64634eea-941a-409b-8028-518dcf0adfd9%2F40u1bc9_processed.png&w=3840&q=75)
Transcribed Image Text:Fill in the blanks to make the following statements correct.
a. When there is no change in the government's fiscal policy, it is still possible for the budget deficit to fall because of changes in the level of economic activity
b. For a given set of fiscal policies, the budget deficit decreases
as real GDP rises and increases
c. The structural budget deficit is the budget deficit that would exist if real GDP equalled potential GDP
"
as real GDP falls.
and the government's expenditure and taxation policies were unchanged
*
*
d. During a recession, when Y is less than Y the actual budget deficit is greater than the structural budget deficit. During an inflationary boom, when Y is greater than Y the actual budget deficit is less than the structural budget deficit.
"
e. Suppose the real interest rate is 2.4 percent and the growth rate of real GDP is 2.9 percent. If the government wants to stabilize the debt-to-GDP ratio, then it is necessary to have a
structural budget surplus
primary budget deficit
primary budget surplus
structural budget deficit
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