If a government runs a cyclically balanced budget,its revenue will equal its expenditure:
A)each year.
B)at each phase of the business cycle.
C)over the course of the business cycle.
D)only during expansions.
E)only during recessions.

Question

Quizplus · Accepted Answer

A cyclically balanced budget implies that over the course of the business cycle, the government's revenue will equal its expenditure. This means that in times of economic expansion, the government will experience a higher revenue and can therefore increase its expenditure, while in times of economic recession, the government will experience a lower revenue and must therefore decrease its expenditure to balance the budget.

If a Government Runs a Cyclically Balanced Budget,its Revenue Will