A procyclical fiscal policy, like those of many state and local governments in the United States, tends to
A)worsen recessions or inflation.
B)become contractionary during inflationary periods.
C)raise government spending or cut taxes during recessions.
D)increase the budget deficit during recessionary periods.

Question

Quizplus · Accepted Answer

A procyclical fiscal policy amplifies economic fluctuations by increasing spending or cutting taxes during booms and reducing spending or raising taxes during recessions, thereby worsening recessions or inflation.

A Procyclical Fiscal Policy, Like Those of Many State and Local