Suppose the Economy Is in a Recessionary Gap

Multiple Choice

Suppose the economy is in a recessionary gap.If government expenditures are currently $700 billion and tax revenues are currently $450 billion,the (total) budget deficit is _____________.Assume that economists estimate that if the economy were operating at full employment then government expenditures would be $600 billion and tax revenues would be $500 billion.The structural deficit is _________________ and the cyclical deficit is _______________.

A) $1.15 trillion; $1.1 trillion; $100 billion
B) $400 billion; $300 billion; $100 billion
C) $400 billion; $100 billion; $300 billion
D) $250 billion; $100 billion; $150 billion