Question

The Congressional Budget Office estimates that if the economy continues to grow at the current rate, there is a 95% probability that the federal defcit will be eliminated without raising taxes within the next 5 years. If the economy slows, that probability drops to 30%, but if it accelerates, the probability increases to 99%. Economists generally agree that there is a 60% chance that the economy will continue to grow at the current rate, a 25% chance that it will slow, and a 15% chance that it will accelerate. Use this information to estimate the likelihood that the federal defcit will indeed be eliminated without new taxes within fve years.


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  • CreatedJuly 16, 2015
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