The cyclically adjusted surplus in the U.S.went from +1.2 percent of GDP in 2000 to âˆ'1.2 percent of GDP in 2002.This suggests that the government during that period
A)cut taxes and/or increased spending.
B)increased taxes and/or cut spending.
C)wanted to rein in inflation.
D)did not change its discretionary fiscal policy.

Question

Quizplus · Accepted Answer

The shift from a surplus to a deficit suggests that the government likely cut taxes and/or increased spending, leading to a decrease in the surplus.

The Cyclically Adjusted Surplus in the U