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If the Economy Goes into a Recession, a Government Budget

Question 61

Multiple Choice

If the economy goes into a recession, a government budget deficit is most likely to


A) decrease, because government expenditures will decrease and tax revenues will rise.
B) remain unchanged, because changes in government expenditures and tax revenues will balance each other out.
C) increase, because government expenditures will rise and tax revenues will decline.
D) increase, because government expenditures and tax revenues will both rise.
E) remain unchanged, although there will be a primary budget surplus.

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