Which of the following describes a cyclical budget deficit?
Government expenditure exceeds tax revenue because the economy is operating below its potential output.
Government expenditure exceeds tax revenue when the economy is operating at its full-employment level of output.
Tax revenue exceeds government expenditure because the economy is operating below its potential output.
Tax revenue exceeds government expenditure when the economy is operating at its full-employment level of output.
68 exam-style questions on OCR A Level Economics Fiscal policy. Each one has a worked solution and a mark scheme showing where the marks go.