Q. Assume that the actual deficit is $150 billion with the economy well below potential output and that the level of economic activity rose to its potential level while tax revenues increased by $50 billion and transfer payments fell by $20 billion. Then, what is the structural deficit? (Solved)

1. $180 billion

2. $120 billion

3. $220 billion

4. $80 billion

  • d. $80 billion
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