1. Fill in the blanks to make the following statements correct. a. The government's budget constraint shows that total government expenditures must be equal to the sum of and b. The government's annual budget deficit is the excess of total over total in a given year. c. If we want to know how much of a government's budget deficit is attributable to current program spending and tax policies, we compute the deficit. This measure tells us the difference between the government's overall budget deficit and its payments. d. If the government's total budget deficit is $20 billion and its debt-service payments are $18 billion, then its is $2 billion, If the total budget deficit is $20 billion and its debt-service payments are $26 billion, then its is $6 billion. 2. Fill in the blanks to make the following statements correct. a. The overall unemployment rate in Canada is not a good indicator of the level of activity in the labour market because it does not indicate b. Gross flow in the labour market are much than net flows in the labour market. c. In a typical month in Canada, workers flow in each direction between unemployment and employment. d. Cyclical unemployment exists when real GDP is than potential GDP. When real GDP is equal to potential GDP, then all unemployment is either e. Market-clearing theories assume that wages do not instantly to clear the market. A recessionary gap can persist and result in unemployment that is 3. Fill in the blanks to make the following statements correct. a. When there is no change in the government's fiscal policy it is still possible for the budget deficit to fall because b. For a given set of fiscal policies, the budget deficit as real GDP rises and as real GDP falls. c. The structural budget deficit is the deficit that would exist if real GDP equalled and the government's were at their current levels. d. During a recession, when Y is less that Y', the actual budget deficit is than the structural budget deficit. During an inflationary boom, when Y is greater than Y". the actual budget deficit is than the structural budget deficit. e. Suppose the real interest rate is 2 percent and the growth rate of real GDP is 1.5 percent. If the government wants to stabilize the debt-to-GDP ratio, then it is necessary to have a(n)