The cyclically adjusted budget deficit calculates the budget surplus or deficit if the economy
A) were in recession.
B) were at potential GDP.
C) was producing above potential GDP.
D) was producing below potential GDP.

Question

Quizplus · Accepted Answer

The cyclically adjusted budget deficit measures the budget balance if the economy were operating at its potential GDP, removing the effects of the economic cycle.

The Cyclically Adjusted Budget Deficit Calculates the Budget Surplus or Deficit