If discretionary fiscal policy creates a federal budget deficit, the economy must be experiencing a decrease in output.

Name: If discretionary fiscal policy creates a federal budget deficit, the economy must be experiencing a decrease in output.
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Question

Quizplus · Accepted Answer

The statement is false. A budget deficit can be caused by various factors other than discretionary fiscal policy, and a decrease in output alone does not necessarily result in a deficit.

If Discretionary Fiscal Policy Creates a Federal Budget Deficit, the Economy