Economics A Level: How does a
1. Cyclical Budget Deficit get fixed
2. Structural Budget Deficit get fixed

Question

How does a 
1. Cyclical Budget Deficit get fixed
2. Structural Budget Deficit get fixed

go kys · Accepted Answer

1. This is done via Recessions and comes when the Automatic Stabilisers [Benefits Up, Tax Rev down] kick in. This will be Corrected when a Boom appears
2. Governments have to Raise Taxes and Reduce Public Expenditure - Austerity. This will Harm Economic Growth

Economics A Level

How does a 1. Cyclical Budget Deficit get fixed 2. Structural Budget Deficit get fixed

1. This is done via Recessions and comes when the Automatic Stabilisers [Benefits Up, Tax Rev down] kick in. This will be Corrected when a Boom appears 2. Governments have to Raise Taxes and Reduce Public Expenditure - Austerity. This will Harm Economic Growth

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