5.10 What variables would a forecast of a future federal budget deficit or surplus depend on?...

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5.10 What variables would a forecast of a future federal budget deficit or surplus depend on? What is it about these variables that make future budget balances difficult to predict?

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Answer 1

Answer #1

Forecast of future federal budget deficits/surpluses depend on Wage growth, Demographics, GDP growth and Profit growth.
Since these economic variables respond to economic shocks, making future budget balances difficult to predict or less predictable.

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