From 2007 to 2009, the federal deficit as a percentage of GDP rose from about 2 percent to about 9 percent. This indicates that by 2009,
A) all of the deficit was cyclical.
B) most of the deficit was cyclical.
C) all of the deficit was structural.
D) most of the deficit was structural.

Question

Quizplus · Accepted Answer

The significant increase in the federal deficit as a percentage of GDP from 2007 to 2009 was largely due to the economic downturn during that period, indicating that most of the deficit was cyclical, related to the business cycle and temporary economic conditions.

From 2007 to 2009, the Federal Deficit as a Percentage