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The Federal Deficit of the United States, Over the Past

Question 7

Multiple Choice

The federal deficit of the United States, over the past three decades, has been


A) strongly procyclical in part because tax revenues rise during recession and fall during boom.
B) strongly anticyclical in part because tax revenues fall during recession and rise during boom.
C) strongly procyclical in part because transfers rise during recession and fall during boom.
D) strongly procyclical in part because tax revenues are stable over the business cycle even as transfers rise during recession and fall during boom.
E) none of the above.

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