3. The Federal Budget and Public Debt

a.What is the difference between the budget deficit and the national (public) debt?

b.Suppose the structural deficit is $50 billion, and the cyclical deficit is $30 billion. What is the actual budget deficit?

c.In part b, does the economy have an inflationary gap or a recessionary gap? Explain.

d.Why does a business downturn (recession) increase the size of the budget deficit?

Answer rating: 100% (QA)

Difference between Budget Deficit and National Public Debt Budget Deficit The budget deficit refers to the amount by which government spending exceeds government revenue in a given period usually a fi... View the full answer