Question

When current government expenditures exceed current tax revenues and the economy is achieving full employment: Group of answer choices fiscal policy is contractionary. the full-employment budget has a deficit. the full-employment budget has neither a deficit nor a surplus. nominal GDP and real GDP are equal.

Answer 1

Answer: the full-employment budget has a deficit

Explanation:

When current government expenditures exceed current tax revenues and the economy is achieving full employment, it means that the full-employment budget has a deficit.

This means that the government of that particular economy is spending more than what it generates. This lead to the deficit that has been incurred.