If the federal budget has an actual budget deficit of $35 billion and a cyclically adjusted budget deficit of $30 billion, then the economy

Question

Quizplus · Accepted Answer

A cyclically adjusted budget deficit smaller than the actual deficit suggests that the economy is below potential real GDP, as the actual deficit is larger due to lower tax revenues or higher spending associated with a recessionary gap.

If the Federal Budget Has an Actual Budget Deficit of $35