In Year 1, the actual budget deficit was $150 billion and the cyclically adjusted deficit was $125 billion.In Year 2, the actual budget deficit was $130 billion and the cyclically adjusted deficit was $125 billion.It can be concluded that from Year 1 to Year 2,

Question

Quizplus · Accepted Answer

The decrease in the actual budget deficit from $150 billion to $130 billion, while the cyclically adjusted deficit remained constant at $125 billion, suggests that the economy improved, likely due to an increase in real GDP, reducing the cyclical component of the deficit.

In Year 1, the Actual Budget Deficit Was $150 Billion