A government has a balanced budget, government spending remains constant, and taxes fall. What happens to this government budget when taxes fall?

Name: A government has a balanced budget, government spending remains constant, and taxes fall. What happens to this government budget when taxes fall?
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Question

Quizplus · Accepted Answer

When taxes fall while government spending remains constant, the government's revenue decreases without a corresponding decrease in expenses, leading to a budget deficit.

A Government Has a Balanced Budget, Government Spending Remains Constant