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Suppose That for the Economy of Chou

Question 71

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Suppose that for the economy of Chou
Tax revenues = 2000 + 0.1 GDP
Transfers = 1500 + 0.05 GDP
Government purchases = 3000
Interest payments = 200
Full employment GDP = 15,000
Actual GDP = 16,000
a.How much is the budget deficit?
b.How much is the primary budget deficit?
c.How much is the full-employment budget deficit?

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