If real GDP equals C in the diagram below,
A)distance df represents a budget surplus.
B)distance de represents a budget surplus.
C)there is a structural surplus.
D)there is a structural deficit.
E)distance de represents a cyclical surplus.

Question

If real GDP equals C in the diagram below, 
A)distance df represents a budget surplus. 
B)distance de represents a budget surplus. 
C)there is a structural surplus. 
D)there is a structural deficit. 
E)distance de represents a cyclical surplus.

Quizplus · Accepted Answer

Distance de represents a budget surplus, as it is the difference between government revenues (at point d) and government expenditures (at point e) at the level of real GDP represented by point C.

If Real GDP Equals C in the Diagram Below