Large federal budget deficits:
A)can best be reduced by automatic stabilizers.
B)make it difficult to use discretionary fiscal policy.
C)in the mid to late 1980s were the result of a severe recession.
D)constitute only about 1 percent of GDP.
E)have little to do with the growth of the federal debt.

Question

Quizplus · Accepted Answer

Large federal budget deficits make it difficult to use discretionary fiscal policy because any further increase in spending or tax cuts might worsen the already existing deficit.

Large Federal Budget Deficits