Chapter 15.3

Question 1

The size of the budget deficit depends on the state of the economy.

true
false

Answer 1

true

Question 2

The structural budget surplus is the size of the budget surplus when

the unemployment rate is zero.

the economy is in an expansion.

there is a spending balance.

the AD curve intersects the IA line.

real GDP equals potential GDP.

Answer 2

real GDP equals potential GDP.

Question 3

Real GDP and the budget deficit are negatively related.

true
false

Answer 3

true