Question

The structural budget surplus is the size of the budget surplus when A. the unemployment rate is zero. B. there is a spending balance. C. real GDP equals potential GDP. D. the AD curve intersects the IA line.

Answer 1

The correct answer is letter "A": the unemployment rate is zero.

Step-by-step explanation:

A budget surplus is an economic rate describing a situation where revenue exceeds expenditures. It is usually used about a government entity. The surplus is typically derived from taxes that occurs when the economy is healthy and growing. The unemployment rate is low so there is less demand for government services.