The cyclically adjusted budget refers to
A) the inﬂationary impact that the automatic stabilizers have in a full-employment economy.
B) that portion of a full-employment GDP that is not consumed in the year it is produced.
C) the size of the federal government's budgetary surplus or deﬁcit when the economy is operating at full employment.
D) the number of workers who are underemployed when the level of unemployment is 4 to 5 percent.

Question

Quizplus · Accepted Answer

The cyclically adjusted budget refers to the size of the federal government's budgetary surplus or deficit when the economy is operating at full employment. It takes into account the automatic stabilizers (such as unemployment insurance) that affect the budget during times of economic expansion or recession, and adjusts for these effects to provide a more accurate assessment of the government's fiscal position.

The Cyclically Adjusted Budget Refers to