If the cyclically adjusted budget deficit goes from 2 percent to 1 percent of GDP, then it indicates that fiscal policy has turned more contractionary.

Name: If the cyclically adjusted budget deficit goes from 2 percent to 1 percent of GDP, then it indicates that fiscal policy has turned more contractionary.
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Question

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A decrease in the cyclically adjusted budget deficit suggests that the government is reducing its deficit spending relative to GDP, indicating a more contractionary fiscal policy stance.

If the Cyclically Adjusted Budget Deficit Goes from 2 Percent