If the level of government expenditures is given, budget surpluses and deficits depend on tax
Jrevenues, which tend to vary directly with GDP.

Question

Quizplus · Accepted Answer

Tax revenues tend to increase with GDP, meaning that when GDP is high, tax revenues are also high, resulting in budget surpluses. On the other hand, when GDP is low, tax revenues are also low, leading to budget deficits.

If the Level of Government Expenditures Is Given, Budget Surpluses