An estimate of what government spending and tax revenue would be if the economy were operating at its natural level of output and employment is called the budget.

Question

Quizplus · Accepted Answer

A cyclically adjusted budget estimate takes into account the natural fluctuations in the economy and provides a more accurate picture of what government spending and tax revenue would be if the economy were operating at its potential level of output and employment. In contrast, inflation-adjusted budgets take into account changes in prices, capital asset budgets focus on investments in long-term assets, and generational accounting estimates are concerned with the long-term fiscal sustainability of government policies.

An Estimate of What Government Spending and Tax Revenue Would