Which of the following is not true about a structural deficit?
A)It exists even if the economy is at full employment.
B)It is influenced by discretionary fiscal spending.
C)It definitely gets larger as unemployment increases.
D)It is determined in part by the actions of Congress.

Question

Quizplus · Accepted Answer

A structural deficit is a budget deficit that exists even when the economy is at full employment. It is usually caused by long-term spending obligations that exceed the government's revenue. It is not necessarily influenced by discretionary fiscal spending, which only affects the budget deficit in the short term. The size of the structural deficit may change as a result of the actions of Congress, but its existence is determined by longer-term spending and revenue patterns over time. However, the structural deficit may increase as unemployment increases if the government provides more social welfare benefits to help struggling households.

Which of the Following Is Not True About a Structural