Rise in structural primary budget balance indicates:
A) expansionary fiscal policy.
B) contractionary fiscal policy.
C) expansionary monetary policy.
D) contractionary monetary policy.

Question

Quizplus · Accepted Answer

A rise in the structural primary budget balance indicates a contractionary fiscal policy, as it suggests that the government is either increasing taxes or decreasing spending to reduce the budget deficit, excluding interest payments and economic cycle effects.

Rise in Structural Primary Budget Balance Indicates