In Year 1, the actual budget deficit was $200 billion and the cyclically adjusted deficit was $150 billion.In Year 2, the actual budget deficit was $225 billion and the cyclically adjusted deficit was $175 billion.It can be concluded that fiscal policy from Year 1 to Year 2 was:

Question

Quizplus · Accepted Answer

The increase in both the actual budget deficit and the cyclically adjusted deficit from Year 1 to Year 2 indicates that fiscal policy was expansionary, as the government increased its spending or reduced taxes, leading to a larger deficit.

In Year 1, the Actual Budget Deficit Was $200 Billion