Figure 5-1

-In Figure 5-1 above,if the budget line is BB₀ and the natural real GDP is $5300,the structural surplus or deficit is

Question

Figure 5-1
 
-In Figure 5-1 above,if the budget line is BB₀ and the natural real GDP is $5300,the structural surplus or deficit is

Quizplus · Accepted Answer

The structural surplus or deficit is the difference between the actual budget deficit and the cyclical budget deficit. The cyclical budget deficit is the amount of the budget deficit that is due to the economy being in a recession. The structural budget deficit is the amount of the budget deficit that would exist even if the economy were at full employment. In Figure 5-1, the actual budget deficit is AD. The cyclical budget deficit is FC. The structural budget deficit is FA.

Figure 5-1 -In Figure 5-1 Above,if the Budget Line Is BB₀ and Line