The structural budget balance measures what the Federal budget deficit or surplus would be at potential output with existing tax and spending decisions.

Question

Quizplus · Accepted Answer

The structural budget balance is indeed an estimate of what the federal budget deficit or surplus would be if the economy were at its potential output, assuming no changes in current tax laws and government spending policies. It aims to show the underlying fiscal position by removing the effects of the economic cycle on revenues and expenditures.

The Structural Budget Balance Measures What the Federal Budget Deficit