The cyclically adjusted budget deficit or surplus measures what the deficit or surplus would be if the economy was

Question

Quizplus · Accepted Answer

The cyclically adjusted budget deficit or surplus measures what the deficit or surplus would be if the economy was at potential GDP, meaning that it is not in a recession or expansionary phase, but rather operating at its full capacity. This allows policymakers to assess the true state of the economy and the government's fiscal position because it removes the effects of the business cycle.

The Cyclically Adjusted Budget Deficit or Surplus Measures What the Deficit