Question
In January 2012, the Congressional Budget Office (CBO) predicted that the U.S. federal government would have a budget deficit equal to 2.0% of GDP and
In January 2012, the Congressional Budget Office (CBO) predicted that the U.S. federal government would have a budget deficit equal to 2.0% of GDP and a cyclically adjusted budget surplus equal to 0.7% of GDP in 2014.
A. Since the contribution of automatic stabilizers to the budget deficit, measured as a share of potential GDP, are forecast to be 1.3%, they are not expected to provide a boost to the economy.
B. Since the contribution of automatic stabilizers to the budget deficit, measured as a share of potential GDP, are forecast to be 2.7%, they are expected to provide a boost to the economy.
C. It is not possible to discern any economic effect of automatic stabilizers from estimates of budget deficits.
D. None of the above.
The correct answer is B, but I can't understand. Can you help me explain, please?
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Acct 1100 Financial Accounting 1 25 Edition
Authors: Carl S. Warren ,James M. Reeve ,Jonathan E. Duchac
1st Edition
1285558839, 978-1285558837
