In January 2019, the Congressional Budget Office (CBO) noted that it had reduced its previous estimate of the federal budget deficit in 2019 by $47 billion. The CBO also noted that over the period from 2019 to 2029, “revisions to CBO’s economic forecast . . . cause $336 billion in reductions to projected deficits.” 

a. Why would the CBO’s forecast of future levels of GDP and employment matter for its forecasts of future federal budget deficits? 

b. If the federal budget deficit turns out to be smaller than expected, is it likely that economic growth was higher or lower than expected? Briefly explain