The Structural Surplus

question 183

Multiple Choice

The structural surplus

• A) is, by definition, equal to the negative of the cyclical deficit.
• B) is legally required to be positive.
• C) equals the actual surplus plus the cyclical surplus.
• D) is the government budget surplus that would exist if the economy was at potential GDP.

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Definitions:

After-Tax Discount Rate

A discount rate that has been adjusted for the effect of taxes, utilized in evaluating the net present value (NPV) of an investment after taxes.

Straight-Line Depreciation

A method of calculating the depreciation of an asset where its cost is evenly spread across its useful life.

Initial Investments

The initial amount of money spent to start a project, purchase assets, or establish a business.

After-Tax Discount Rate

The rate of return after taxes have been calculated, used in evaluating the profitability of investment opportunities.