please answer b), c), d) Government expenditures, G.and tax revenues, TRefer to the figure below to answer the questions that follow.SurplusGDeficitGDP,GDP,GDP,Real domestic output, GDPlevela. The cyclically adjusted budget measures what the federal deficit or surplus would be if the economy reached theof GDPO actualO normalO full-employmentO equilibrium b. If the cyclically adjusted budget is balanced, thenO government is engaging in either expansionary or contractionary policy.O the actual budget is in surplus.government is not engaging in either expansionary or contractionary policy.O the actual budget is also balanced.c. Suppose the full-employment, noninflationary level of real output is GDP3 (not GDP2) in the economy depicted in the figure. If theeconomy is operating at GDP2 instead of GDP3, its current fiscal policy isO contractionary, since a surplus would exist.O contractionary, since a deficit would exist.O balanced, since there is no deficit.O expansionary, since a surplus would exist.d. If the government wants to move the economy to full employment, it shouldO cut taxes or increase spending.O increase taxes or increase spending.O cut taxes or decrease spending.O cut taxes or keep spending constant.

The entire monetary worth of all the goods and services produced within the geographic limits of a…

Answered: Government expenditures, G. and tax…

Government expenditures, G. and tax revenues, T Refer to the figure Deficit GDP, Real a. The cyclically ac of GDP. O actual O normal O full-emplo O equilibriur

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

please answer b), c), d)

b. If the cyclically adjusted budget is balanced, then
O government is engaging in either expansionary or contractionary policy.
O the actual budget is in surplus.
government is not engaging in either expansionary or contractionary policy.
O the actual budget is also balanced.
c. Suppose the full-employment, noninflationary level of real output is GDP3 (not GDP2) in the economy depicted in the figure. If the
economy is operating at GDP2 instead of GDP3, its current fiscal policy is
O contractionary, since a surplus would exist.
O contractionary, since a deficit would exist.
O balanced, since there is no deficit.
O expansionary, since a surplus would exist.
d. If the government wants to move the economy to full employment, it should
O cut taxes or increase spending.
O increase taxes or increase spending.
O cut taxes or decrease spending.
O cut taxes or keep spending constant.

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