Economists refer to a budget deficit which exists when the economy is achieving full employment as a:
A)cyclical deficit.
B)surplus in the full-employment budget.
C)natural deficit.
D)cyclically adjusted deficit.

Question

Quizplus · Accepted Answer

A cyclically adjusted deficit is a budget deficit that takes into account the impact of the business cycle on government revenues and expenditures. When the economy is at full employment, the cyclically adjusted deficit gives a more accurate picture of the government's long-term budget situation, as it takes out the effects of temporary fluctuations in the economy.

Economists Refer to a Budget Deficit Which Exists When the Economy