In order to maintain a balanced budget every year,during a recession the government would have to
A)Decrease the money supply.
B)Increase the money supply.
C)Decrease spending or increase taxes or both.
D)Increase spending or decrease taxes or both.

Question

Quizplus · Accepted Answer

During a recession, the government would have a decrease in revenue due to decreased economic activity. In order to maintain a balanced budget, the government would need to decrease spending or increase taxes or do both. This would help to offset the decrease in revenue and maintain a balanced budget. Decreasing the money supply or increasing spending or decreasing taxes would not help to maintain a balanced budget and could lead to further economic instability.

In Order to Maintain a Balanced Budget Every Year,during a Recession