The cyclical deficit is $400 billion, potential output is $9 trillion and the tax rate is 16 percent. with this information, we can infer that the actual output of this economy is:

The cyclical deficit is $400 billion, potential output is $9 trillion and the tax rate is 16 percent. With this information, we can infer that the actual output of this economy is : $6.5 trillion.

Explanation:

The cyclical deficit occurs at the bottom of an economic cycle. A deficit occurs when the government spends more than they take in and the expenditure is more.

For calculating the cyclical deficit the tax rate must be multiplied by potential output subtracted from the actual output. So from this, we get to form that the actual output is $6.5 trillion.

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