Suppose that the economy has a structural surplus of $100 billion and is operating above potential output. From this we can infer that the budget as a whole:

Question

Quizplus · Accepted Answer

When the economy is operating above potential output, it typically results in a cyclical surplus due to higher tax revenues and lower government spending on welfare. Given a structural surplus of $100 billion, the overall budget is likely in surplus.

Suppose That the Economy Has a Structural Surplus of $100