Question

If a structural surplus exists but the government's budget is balanced, then ______.

Answer 1

If a structural surplus exists but the government's budget is balanced, then real GDP is less than potential GDP.

What do you mean by Government's budget?

A government budget is referring to as the budget that consists of the documents made by government or other political entity representing its anticipated tax revenue.

Moreover, there are basically three types of government budget that consists of balanced budget, surplus budget and deficit budget.

In case of surplus in structural happens then the real GDP is less than the expected GDP. Here, GDP is defined as Gross Domestic product. These budgets are helpful to make a decision regarding tax and spending and for consuming and investing.

Adding to it, structural surplus is the difference between government of fiscal revenue at the time of cyclical peaks.

Learn more about government's budget, refer to the link:

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