Recessions have contributed to the public debt by
A) reducing national income and therefore tax revenues.
B) increasing real interest rates.
C) increasing the international value of the dollar.
D) increasing national saving.

Question

Quizplus · Accepted Answer

During recessions, the national income decreases due to decreased economic activity and job losses. This directly leads to a decrease in tax revenues for the government, thereby increasing the public debt.

Recessions Have Contributed to the Public Debt by