The reason why the budget deficit increases during recessions is:

Question

Quizplus · Accepted Answer

During recessions, more people lose their jobs and income, leading to increased demand for welfare payments, which are funded by the government. This increases government spending and contributes to the budget deficit. Higher tax revenues are unlikely during recessions as there is lower economic activity and lower profits for businesses, leading to lower tax revenues for the government. Lower tax rates would also contribute to a budget deficit, not reduce it.

The Reason Why the Budget Deficit Increases During Recessions Is