At the end of 2014, the economy was ________ and the deficit was ________.
A) at full employment; entirely structural
B) above full employment; entirely structural
C) not quite at full employment; partially cyclical
D) well below full employment; entirely cyclical

Question

Quizplus · Accepted Answer

The unemployment rate at the end of 2014 was 5.6%, which is close to the natural rate of unemployment, indicating that the economy was not quite at full employment. Additionally, the deficit was still high but was decreasing, suggesting that it was partially cyclical (due to the economic slowdown) but also had some structural components. Option A and B are incorrect as they suggest the economy was above or at full employment, which was not the case. Option D is also incorrect as it suggests the deficit was entirely cyclical, which is not true.

At the End of 2014, the Economy Was ________ and the Deficit