The structural deficit or surplus
A)shows the government where to make cuts in expenditures to follow the balanced budget requirement.
B)reveals the complicated structure underlying government spending and tax policy.
C)is the hypothetical deficit or surplus under current fiscal policies if the economy were operating near full employment.
D)includes all government budgets-federal, state, and local.

Question

Quizplus · Accepted Answer

The structural deficit or surplus is the hypothetical deficit or surplus under current fiscal policies if the economy were operating at full employment. It is a measure of the long-term sustainability of a country's fiscal policy, taking into account the automatic stabilizers that tend to increase deficits during recessions and decrease deficits during expansions. The structural deficit or surplus is an important concept for policymakers to understand when making decisions about taxes and spending. Options A, B, and D do not accurately describe the structural deficit or surplus.

The Structural Deficit or Surplus