The Cyclically Adjusted Budget Deficit

question 80

Multiple Choice

The cyclically adjusted budget deficit:

• A) adjusts the deficit for inflation.
• B) estimates what the deficit would be if the economy were operating at the natural rate of output.
• C) accounts for assets as well as liabilities.
• D) measures the impact of fiscal policy on the lifetime incomes of individuals of different ages.

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to buy at a specific price.

Market Equilibrium

A situation in a market where the quantity of a product demanded by consumers equals the quantity supplied by producers.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, typically set below the equilibrium price.

Shortage

A situation in which the demand for a product or service exceeds the supply available at a particular price.