If the structural deficit is zero,
A)Federal tax revenue equals federal government expenditures at any equilibrium GDP.
B)If the economy goes above full employment,the cyclical deficit will get larger.
C)If the economy enters a recession,a budget surplus will result,ceteris paribus.
D)At full employment,the budget is balanced.

Question

Quizplus · Accepted Answer

A structural deficit of zero means that the budget is balanced (revenues equal expenditures) when the economy is at full employment. Choices A, B, and C describe different scenarios that are not directly related to the definition of a structural deficit being zero.

If the Structural Deficit Is Zero