Which of the following would increase the cyclically adjusted deficit?
A) A decrease in income.
B) An increase in the primary surplus.
C) An increase in income.
D) A decrease in the primary deficit.
E) An increase in the primary deficit.

Question

Quizplus · Accepted Answer

The cyclically adjusted deficit is a measure of the government's budget deficit that takes into account the state of the economy. An increase in the primary deficit (i.e. government spending exceeds revenue) would increase the cyclically adjusted deficit, as it would add to the government's overall debt burden.

Which of the Following Would Increase the Cyclically Adjusted Deficit