Which one of the following statements about the budget deficit or surplus over the business cycle is correct?

Question

Quizplus · Accepted Answer

Automatic fluctuations in the budget deficit act as automatic stabilizers, meaning that during a recession, the budget deficit tends to increase automatically due to decreased tax revenues and increased spending on programs such as unemployment benefits. During an expansion, the opposite tends to occur, with the budget deficit decreasing as tax revenues increase and spending on these programs declines.

Which One of the Following Statements About the Budget Deficit