Question

What do economists use to estimate the annual deficit or surplus that would occur under existing tax rates and government spending levels if the economy were to operate at full employment?

-Built-in stabilizer
-Progressive tax system
-Cyclically adjusted budget
-Expansionary fiscal policy

Answer 1

Economists use cyclically adjusted budget to estimate the annual deficit or surplus that would occur under existing tax rates and government spending levels if the economy were to operate at full employment.

Step-by-step explanation:

Economists use cyclically adjusted budget to estimate the annual deficit or surplus that would occur under existing tax rates and government spending levels if the economy were to operate at full employment. The cyclically adjusted budget takes into account the potential GDP and adjusts for the fluctuations in the economy, such as recessions and booms.