An increased federal budget deficit resulting from a recession can actually help stabilize an economy, because corporate profits tend to fall in a recession which, in turn, results in ________ corporate taxes and ________.

Question

Quizplus · Accepted Answer

During a recession, corporate profits tend to fall, leading to lower corporate taxes. This, in turn, can result in fewer spending cuts for businesses as they have less tax liability, allowing them to potentially stabilize their operations during economic downturns.

An Increased Federal Budget Deficit Resulting from a Recession Can