Ask Question
30 September, 13:36

Why is the cyclical adjusted budget balnce a better measure of long run sustainability of government policies than the actual budget balance?

+5
Answers (1)
  1. 30 September, 13:58
    0
    Because cyclical adjusted Budget balance would give the estimation of what the balance would be if real GDP were exactly equal to potential output.

    In the long-run GDP would move closer to the amount in potential output. So using Cyclical adjusted Budget would give better projection to maintain long-term sustainability.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Why is the cyclical adjusted budget balnce a better measure of long run sustainability of government policies than the actual budget ...” in 📗 Social Studies if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers