The cyclically adjusted budget tells us
A)that in a full-employment economy, the federal budget should be in balance.
B)that tax revenues should vary inversely with GDP.
C)what the size of the federal budget deficit or surplus would be if the economy was at full employment.
D)the actual budget deficit or surplus realized in any given year.

Question

Quizplus · Accepted Answer

The cyclically adjusted budget measures what the federal budget deficit or surplus would be if the economy were operating at full employment, removing the effects of the economic cycle.

The Cyclically Adjusted Budget Tells Us