US Budget Deficit

Question 1

Cyclical factors=

Answer 1

• recession
• economic recovery measures (expansionary fiscal)
• financial intervention (bail out banks)

Question 2

Structural factors=

Answer 2

• tax cuts

- cost of wars (unexpected spending)

Question 3

Causes of the US budget deficit

Answer 3

• tax to prevent too big of a surplus
• healthcare spending
• ageing population
• temporary fiscal measures to promote growth
• cyclical factors (recession)