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What is the cyclically adjusted budget deficit? How can it be calculated?

What is the cyclically adjusted budget deficit? How can it be calculated?

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Answer #1

MEANING OF CYCLICALLY ADJUSTED BUDGET DEFICIT

It is caused because of slowing economy and rather than the policies like fiscal such as inclination of the spending which is discretionary in nature or the decline in rates of tax .

HOW IT CAN BE CALCULATED

If we deduct '' R '' from the budget deficit which is federal just to obtain the CYCLICALLY ADJUSTED BUDGET DEFICIT .

R stands for

Deduction of the recession era tax revenue from the non recession era  .

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