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Mila [183]
4 years ago
7

Why is the cyclical adjusted budget balnce a better measure of long run sustainability of government policies than the actual bu

dget balance?
Social Studies
1 answer:
koban [17]4 years ago
8 0
<span>Because cyclical adjusted  Budget balance would give the estimation of<em> what the balance would be</em> if real GDP were exactly equal to potential output.
In the long-run GDP would move closer to the amount in potential output. So using Cyclical adjusted Budget would give better projection to maintain long-term sustainability.</span>
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