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