The Cyclically Adjusted Budget Balance Is an Estimate Of

Multiple Choice

The cyclically adjusted budget balance is an estimate of:

A) the contractionary fiscal policy needed to close an inflationary gap.
B) the tax increase needed to compensate for larger government transfers so that the budget remains balanced.
C) the expansionary fiscal policy needed to close a recessionary gap.
D) what the budget balance would be if real GDP were exactly equal to potential output.