8) Potential GDP is $10 trillion and actual real GDPis $8 trillion. The economy

Question

8) Potential GDP is $10 trillion and actual real GDPis $8 trillion. The economy has a structural deficit of $1.5 trillion and an actual deficit of $2 trillion. The cyclical deficit is A) $3.5 trillion. B) $2 trillion. C) S0.5 trilli D) zero 9) Consider the economy of NoTax, where the multiplier is 2.5. If the government desires to shift the AD curve rightward by $5 billion, the correct increase in government expenditure is A) S3 billion B) $2 billion C) $7.5 billion. D) $8.33 billion. E) $2.5 billion. 0

Explanation / Answer

Answer 8= Cyclical deficit is = actual deficit - strcutural deficit = 2 -1.5 = $0.5 trillion

Answer 9= $2 billion

Related Questions

Navigate

• Browse (All)
• Browse 8
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.