The cyclical deficit:
A. is the deficit that exists if the economy is at potential income.
B. rises as the economy moves below potential output.
C. is not affected by changes in actual income or potential income.
D. rises as the economy expands and falls as the economy contracts.
Answer: B
You might also like to view...
If the fundamental value of the nominal exchange rate equals 0.20 U.S. dollars per franc, but the franc is officially fixed at 0.15 U.S. dollars per franc, then the franc exchange rate is ________ and to maintain this exchange rate there will be ________ in the government's stock of international reserves.
A. undervalued; a net increase B. undervalued; a net decline C. overvalued; a net increase D. overvalued; a net decline
The tables above show a nation's labor demand and labor supply schedules and its production function. Given the equilibrium in the labor market, potential GDP is
A) $3.0 trillion. B) $3.7 trillion. C) $4.2 trillion. D) $4.5 trillion. E) $2.0 trillion.
What was the total of U.S.-owned assets abroad in 2017?
a. -$1,183 billion
b. -$552 billion
c. $221 billion
d. $1,537 billion
Which of the following is the formula used for computing economic profits?
A. economic profits = total revenue - implicit costs B. economic profits = total costs - total revenue C. economic profits = total revenue - (implicit costs + explicit costs) D. economic profits = total revenue - explicit costs