Cyclical deficits ________, and large structural deficits ________.
A) are usually temporary and do not pose long-run problems; can have negative long-run consequences
B) are usually permanent and often pose long-run problems; can have negative long-run consequences
C) usually have negative long-run consequences; are usually temporary and do not pose long-run problems
D) usually have negative long-run consequences; are usually temporary but often pose long-run problems

Question

Quizplus · Accepted Answer

Cyclical deficits are usually caused by short-term economic fluctuations and tend to be temporary. Therefore, they do not pose long-term problems. On the other hand, large structural deficits are caused by a mismatch between spending and revenue and are usually more prolonged, leading to negative long-term consequences such as high debt levels and reduced economic growth.

Cyclical Deficits ________, and Large Structural Deficits ________

Cyclical Deficits , and Large Structural Deficits