Answer:
The structural budget in 2010 is $100 billion
Explanation:
Actual deficit = Government spending - Tax Revenue Collection
i.e Actual deficit = G-T
T = (Tax rate) (Actual output)
$400 billion = G - (0.15)($6000 billion)
$400 billion = G - $900 billion
G = $400 billion + $900 billion
G = $1300 billion
Thus, Government spending is $1300 billion
Structural deficit = G - T'
T' = (Tax rate)(Potential output)
T' = (0.15)(8000 billion)
T' = $1200 billion
Structural deficit = G - T'
Structural deficit = $1300 billion - $1200 billion
Structural deficit = $100 billion
Thus, the structural budget in 2010 is $100 billion
