The diagram below shows two budget deficit functions for a hypothetical economy. Budget Deficit (millions of dollars) 14 7.5 Real GDP (millions of dollars) 100 200 300 400 500 600 700 Budget Surplus (millions of dollars) Bo FIGURE 31-2 FIGURE 31-2 Refer to Figure 31-2. Initially, suppose real GDP is $100 million and the budget deficit is $14 million, as shown by point A. Which of the following events could result in a move from point A to point C? A) a fiscal contraction and a decrease in GDP

The diagram below shows two budget deficit functions for a hypothetical economy. Budget Deficit (millions of dollars) 14 7.5 Real GDP (millions of dollars) 100 200 300 400 500 600 700 Budget Surplus (millions of dollars) Bo FIGURE 31-2 FIGURE 31-2 Refer to Figure 31-2. Initially, suppose real GDP is $100 million and the budget deficit is $14 million, as shown by point A. Which of the following events could result in a move from point A to point C? A) a fiscal contraction and a decrease in GDP

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In 2010, the country of Lykesville had a balance budget, no debt, and its GDP was $31500. In 2011, it spent $11500 and had $100000 in tax revenue, and its GDP in creased to $37500. In 2012, it spent $13500 and had $13000 in tax revenue, and its GDP further increased to $37500. Did Lykesville runa budget deficit or budget surplus in 2012? What was Lykesville's Debt-GDP ration, expressed as a % at the end of 2012?
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