The graph shows the outlays and revenues curves for an economy.

Actual real GDP is $1,300 billion.

Draw a vertical line that shows a value of potential GDP such that the economy has a cyclical deficit.

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Part 1

The cyclical surplus or deficit ______.

A.

is the actual budget balance

B.

is the budget balance that would occur if the economy were at full employment

C.

equals zero when the economy is in an expansion

D.

is the actual surplus or deficit minus the structural surplus or deficit