Actual federal budgets are not an accurate measure of discretionary fiscal policy because:
A)it is difficult to measure government spending accurately.
B)people cheat on their income taxes.
C)budget deficits increase during expansions even without changes in fiscal policy.
D)budget deficits increase during recessions even without changes in fiscal policy.
E)earlier administrations may have contributed to current budget deficits.

Question

Quizplus · Accepted Answer

Budget deficits tend to increase during recessions even without changes in fiscal policy due to automatic stabilizers such as increased spending on unemployment benefits and lower tax revenues from decreased economic activity. Therefore, actual federal budgets may not accurately reflect the discretionary fiscal policy decisions of the current administration.

Actual Federal Budgets Are Not an Accurate Measure of Discretionary