In 2013, Canada had
A)a structural deficit and a cyclical deficit.
B)a structural deficit and a cyclical surplus.
C)a structural surplus and a cyclical deficit.
D)a structural surplus and a cyclical surplus.
E)a balanced structural budget and a cyclical deficit.

Question

Quizplus · Accepted Answer

A structural deficit occurs when government spending exceeds revenue on a consistent basis, while a cyclical deficit occurs due to economic fluctuations and decreased tax revenue during downturns. In 2013, Canada was still recovering from the global financial crisis and therefore experienced a cyclical deficit. Additionally, the country was facing long-term spending commitments that exceeded revenue, resulting in a structural deficit.

In 2013, Canada Had