The cyclically adjusted budget deficit in an economy is zero.If this economy goes into recession, then the actual government budget will be
A)balanced.
B)in deficit.
C)in surplus.
D)expanding.

Question

Quizplus · Accepted Answer

During a recession, tax revenues typically decrease and government spending on social programs increases, leading to an actual budget deficit even if the cyclically adjusted budget is balanced.

The Cyclically Adjusted Budget Deficit in an Economy Is Zero