Norland has the budget deficit of $15 billion. According to the government economists, Norland has a structural deficit of $3 billion. What is a cyclical deficit in Norland?

Question

Quizplus · Accepted Answer

The cyclical deficit is the difference between the actual budget deficit and the structural deficit. Thus, the cyclical deficit in Norland would be $15 billion (actual budget deficit) - $3 billion (structural deficit) = $12 billion (cyclical deficit). Therefore, the correct answer is D.

Norland Has the Budget Deficit of $15 Billion