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.

Question

Quizplus · Accepted Answer

A structural deficit is the portion of the budget deficit that remains even when the economy is at full employment. It is caused by long-term spending commitments, such as entitlement programs, that exceed the level of revenue that can be raised through current tax policies. Discretionary fiscal spending, which is determined by Congress on a year-to-year basis, can impact overall deficits but does not directly affect the structural deficit. The size of the structural deficit is not necessarily correlated with changes in unemployment rates.

Which of the Following Is Not True About a Structural