What is the difference between the actual deficit, the cyclically adjusted deficit, and the cyclical deficit?
What will be an ideal response?
The actual budget deficit for any year consists of the cyclically adjusted and the cyclical deficit. The cyclically adjusted deficit is the difference between government expenditures and tax collections which would occur if there were full employment output. The cyclical deficit is the portion of the actual deficit that arises because the economy is in recession and is produced by this downturn in the business cycle. During a recession, a cyclical deficit often occurs because tax revenues fall as incomes fall and government expenditures increase as more is spent for government transfer payments and other programs. The cyclical deficit occurs because of the operation of these automatic stabilizers.
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The Federal Reserve System is organized into ________ Federal Reserve districts
A) 6 B) 10 C) 12 D) 15 E) 50
The most significant international undertaking to prevent worsening of global warming is the
a. Montreal Protocol b. Rio Declaration c. Agenda 21 d. Kyoto Protocol e. None of the above
Which of the following hypotheses about voter behavior have been advanced in public-choice literature?
a. Voters are myopic b. Unemployment is more likely to result in vote loss than is higher inflation c. Deficit bias of the budget process d. Both a and c e. All of the above
If minimum wage legislation does cause unemployment, then:
A. those who are lucky enough to land jobs benefit. B. those who become unemployed as a result lose. C. firms will not bear the entire burden of the higher cost of employment. D. All of these are true.