In Figure 5-1 above, if the budget line BB0, the natural real GDP is $5300, and actual real GDP is $5000, then the cyclical budget surplus or deficit is the
A) horizontal distance between A and F.
B) vertical distance between F and D.
C) vertical distance A and F.
D) horizontal distance between B and D.
B
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If demand is price elastic,
A) a 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent. B) a 1 percent increase in the price leads to an increase in the quantity demanded that exceeds 1 percent. C) a 1 percent decrease in the price leads to a decrease in the quantity demanded that is less than 1 percent. D) the price is very sensitive to any shift of the supply curve.
Which of the following best defines total wealth?
A) financial wealth only B) financial wealth and housing wealth only C) human wealth only D) non-human wealth and human wealth E) none of the above