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Congressional budget office

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Reference no: EM131171181

Read the newsclip, then answer the following question.

If the deficit-reduction plan includes a cut in transfer payments and a rise in taxes of the same amount, the policy will______ the budget deficit and______ real GDP.

CBO estimates $1.3 trillion deficit for 2011

The Congressional Budget Office (CBO) predicts that the federal budget deficit hit a near-record $1.3 trillion in the just-completed fiscal year. The 2011 deficit equaled 8.6% of GDP, a slight drop from the 8.9% of GDP in 2010. It'll take some combination of new revenues and major spending cuts to get the deficit down to about 3% of GDP, the level that many analysts say is sustainable.

A. not change; not change
B. increase; decrease
C. decrease; increase
D. increase; increase
E. decrease; decrease

 

Reference no: EM131171181

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