The structural deficit can be defined as

Question

Quizplus · Accepted Answer

The structural deficit is a hypothetical estimate of the deficit that would exist if the economy were operating at a fixed high-employment level, given current tax rates and expenditure policies. It is used to analyze how various policy changes might affect the deficit over time. A is incorrect because the structural deficit does not necessarily obstruct economic recovery. C and D are incorrect because the structural deficit is not necessarily a deficit that is necessary or desired for restructuring the economy or achieving high employment levels.

The Structural Deficit Can Be Defined as