Refer to the diagram, where T is tax revenues and G is government expenditures. All figures are in billions of dollars. If the full-employment and actual GDP are each $400 billion, government can balance its cyclically adjusted budget by:
A. increasing T by $40 billion.
B. reducing G by $20 billion.
C. reducing T by $20 billion.
D. increasing T by $10 billion and reducing G by $20 billion.
B. reducing G by $20 billion.
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Charlie's consumer surplus from the first slice of pizza he buys is greater than the consumer surplus from the second slice because of
A) decreasing marginal benefits. B) increasing marginal benefits. C) decreasing marginal costs. D) increasing marginal cost.
Which of the following statements is (are) true?
A) A model is a set of simplifying assumptions about some aspect of the real world. B) Models are based on assumed conditions that are simpler than those of the real world. C) A model cannot be a complete representation of the real world. D) All of the above are true.