If the actual budget deficit is $80 billion, the economy is operating $150 billion below its potential, and the marginal tax rate is 25 percent, what are the structural deficit and the cyclical deficit?

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter14: Multinational Capital Budgeting
Section: Chapter Questions
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If the actual budget deficit is $80 billion, the economy is
operating $150 billion below its potential, and the marginal
tax rate is 25 percent, what are the structural deficit and the
cyclical deficit?
Transcribed Image Text:If the actual budget deficit is $80 billion, the economy is operating $150 billion below its potential, and the marginal tax rate is 25 percent, what are the structural deficit and the cyclical deficit?
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