Suppose the government purposely changes the economy's cyclically adjusted budget from a deficit of 3 percent of real GDP to a surplus of 1 percent of real GDP.The government is engaging in a(n)

Question

Quizplus · Accepted Answer

The government is reducing the deficit and moving to a surplus, which indicates a contractionary fiscal policy aimed at reducing aggregate demand.

Suppose the Government Purposely Changes the Economy's Cyclically Adjusted Budget