If the cyclically adjusted budget has a zero deficit but the actual budget has a $100 billion deficit, then that means that the government is pursuing an expansionary fiscal policy.

Question

Quizplus · Accepted Answer

A zero cyclically adjusted budget indicates that the deficit is due to economic conditions, not discretionary fiscal policy. An expansionary fiscal policy would involve deliberate increases in spending or tax cuts.

If the Cyclically Adjusted Budget Has a Zero Deficit but the Actual