Question

the structural deficit part 2 a. acts as an automatic stabilizer. b. is the same as cyclical deficit. c. remains the same at full employment. d. increases during recessions.

Answer 1

The structural deficit acts as an automatic stabilizer and increases during recessions.

Step-by-step explanation:

The structural deficit is a term used in economics to describe a situation where government expenditures exceed government revenues, excluding cyclical and temporary factors. The structural deficit acts as an automatic stabilizer in the economy, meaning that it helps to stabilize economic fluctuations. During recessions, the structural deficit tends to increase as government spending on unemployment benefits and other safety net programs goes up.

Answer 2

the structural deficit d. increases during recessions.

What is structural deficit?

A structural deficit is a fiscal shortfall that arises from an underlying mismatch between a government's long-term spending and revenue streams. A cyclical deficit, which results from variations in economic growth, is not the same as a structural deficit.

During recessions, the structural deficit rises automatically as a stabilizing mechanism. Any policy-independent technique or activity that helps to lessen economic fluctuations is referred to as an automated stabilizer. Unemployment benefits are one example of an automatic stabilizer. This is due to the fact that during a recession, unemployment benefits are automatically increased, which boosts consumer spending.