Which of the following statements is true?
A) When an economy operates at the full employment level, it is at a point above its production possibility frontier.
B) Government de?cits tend to increase during recessions.
C) An economy that is booming is at its full employment level.
D) As economies boom, tax receipts fall and government spending increases.

Question

Quizplus · Accepted Answer

Government deficits tend to increase during recessions because tax revenues fall due to lower income and corporate profits, and government spending increases on social welfare programs like unemployment benefits to support the economy.

Which of the Following Statements Is True