If the budget deficit is $50 billion and the structural deficit is $10 billion, the cyclical deficit is
A)$10 billion.
B)$40 billion.
C)$60 billion.
D)$50 billion
E)$20 billion.

Question

Quizplus · Accepted Answer

The cyclical deficit is the portion of the budget deficit that results from the natural fluctuations of the business cycle. It can be calculated by subtracting the structural deficit from the total budget deficit. 
So, Cyclical deficit = Budget deficit - Structural deficit
Cyclical deficit = $50 billion - $10 billion = $40 billion
Therefore the answer is B, $40 billion.

If the Budget Deficit Is $50 Billion and the Structural