-Using the above figure, if full employment occurs at $18 trillion, but the economy is actually producing $19 trillion, then there is a
A) cyclical deficit.
B) cyclical surplus.
C) structural deficit.
D) structural surplus.

Question

-Using the above figure, if full employment occurs at $18 trillion, but the economy is actually producing $19 trillion, then there is a
A) cyclical deficit. 
B) cyclical surplus. 
C) structural deficit. 
D) structural surplus.

Quizplus · Accepted Answer

When the economy is producing more than the full employment output ($19 trillion vs. $18 trillion), it indicates that the economy is in an expansion phase, leading to higher tax revenues and potentially lower government spending on unemployment benefits, etc., which can result in a cyclical surplus.

-Using the Above Figure, If Full Employment Occurs at $18