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Potential GDP is $12 trillion. If real GDP equaled potential GDP, the budget deficit would be $1 trillion.

Real GDP actually equals $14 trillion, and the budget surplus is $3 trillion.

The economy has a structural ______ and a cyclical ______.

A. surplus of $3 trillion; surplus of $2 trillion

B. deficit of $1 trillion; surplus of $2 trillion

C. surplus of $4 trillion; deficit of $1 trillion

D. deficit of $1 trillion; surplus of $4 trillion

Answer :

Answer:

D. deficit of​ $1 trillion; surplus of​ $4 trillion

Explanation:

If the economy reaches their potential at 12 trillion the government would run a deficit of 1 trilllon which means there is an structural deficit of 1 trillion

As currently there is a surplus of 3 trillion This mean the economy is in a cycle under which there is a surplus of 4 trillion

current budget - structural budget = cyclical

3 - (-1) = 3 + 1 = 4

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Rewritten by : Jeany

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