Which of the following is the best indication that the government is pursuing restrictive fiscal policy?
A)The total deficit increases.
B)The structural deficit increases.
C)The cyclical deficit increases.
D)The structural deficit decreases.

Question

Quizplus · Accepted Answer

The best indication that the government is pursuing restrictive fiscal policy is when the structural deficit decreases. A structural deficit occurs when a government's expenditures consistently exceed its revenues, even when the economy is booming. By decreasing the structural deficit, the government is cutting back on its spending and reducing the size of the deficit. This is an indication that the government is pursuing a more restrictive fiscal policy, which is aimed at reducing inflation and slowing down economic growth.

Which of the Following Is the Best Indication That the Government