Waxwania is producing $550 of real gdp, whereas the potential real gdp (or full-employment real gdp) is $650. how large is its budget deficit?

With the data we have at our disposal on Waxwania, we can analyze that if the real GDP is $550, which would be the level of real production, that is, what it produced; and knowing that the real potential GDP is $650, that is, the level of production that the economy can reach with the efficient use of production factors, we can see that this economy is functioning at a lower level than it could. Therefore we can say that the budget deficit is $100.

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azikennamdi azikennamdi · Answer 2 · 2022-04-05T13:56:39+02:00

The Budget Deficit is $100. This is obtained by removed the existing from the potential. That is Potential GDP - Current GDP;

$650 - $550 = $ 100 Deficit.

What is a Budget Deficit?

A budget deficit is defined as the difference between the expenses and revenue. It also indicates the financial health or condition of the performance of a country.

Budget Deficit is mostly used by the government generally to describe its own spending rather than businesses or individuals.

Learn more about Budget Deficit at:
https://brainly.com/question/26010226