5. Refer to the table for Waxwania in problem 4. Suppose that Waxwania is producing $600 of real GDP, whereas the potential real GDP (or full-employment real GDP) is $700. How large is its budget deficit? Its cyclically adjusted budget deficit?

Its cyclically adjusted budget deficit as a percentage of potential real GDP? Is Waxwania’s fiscal policy expansionary or is it contractionary? LO33.3