The structural deficit is defined as
A)that part of the deficit that is so hard to remove that it is never reduced.
B)the portion of the budget deficit that occurs because the economy is not at full employment.
C)the hypothetical deficit the economy would have under current fiscal policies if the economy were operating near full employment.
D)the actual budget deficit that exists in the economy.

Question

Quizplus · Accepted Answer

The structural deficit refers to the hypothetical budget deficit that would exist under current fiscal policies if the economy were operating at or near full employment. In other words, it is the portion of the budget deficit that is not tied to temporary economic conditions or one-time events, but rather represents an underlying imbalance between spending and revenue.

The Structural Deficit Is Defined as