The first table displays Congressional Budget Office forecasts made in January 2015 of future federal budget deficits. Compare these forecasts with actual deficits for those same years (see the second table), and then answer the questions.Year:201520162017201820192020Deficit forecast (in billions of dollars)−468−467−489−540−652−739 Fiscal YearBudget Balance =Cyclical Component +Structural Component2015−439−86−3532016−585−76−5092017−665−53−6122018−77911−7902019−98453−1,0372020−1,07487−1,161a. From 2015–2020, in how many years was the CBO too optimistic (underestimating the deficit)? b. During this same period, in how many years was the CBO too pessimistic? c. In which year the the CBO miss their estimate by the largest amount? d. How much was added to the national debt from 2015 through 2020? $ trillione. During the same years, how much was the national debt increased from the cyclical component? $ billion

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The first table displays Congressional Budget Office forecasts made in January 2015 of future federal budget deficits. Compare these forecasts with actual deficits for those same years (see the second table), and then answer the questions.

Year:	2015	2016	2017	2018	2019	2020
Deficit forecast (in billions of dollars)	−468	−467	−489	−540	−652	−739

Fiscal Year	Budget Balance =	Cyclical Component +	Structural Component
2015	−439	−86	−353
2016	−585	−76	−509
2017	−665	−53	−612
2018	−779	11	−790
2019	−984	53	−1,037
2020	−1,074	87	−1,161

a. From 2015–2020, in how many years was the CBO too optimistic (underestimating the deficit)?

b. During this same period, in how many years was the CBO too pessimistic?

c. In which year the the CBO miss their estimate by the largest amount?

d. How much was added to the national debt from 2015 through 2020? $ trillion

e. During the same years, how much was the national debt increased from the cyclical component? $ billion

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