If a law is passed that forces the federal government to balance its budget annually, then it will require the government to increase expenditures and/or decrease taxes during a recession, thus making the recession worse.

Question

Quizplus · Accepted Answer

A law requiring the federal government to balance its budget annually would likely necessitate decreasing expenditures and/or increasing taxes during a recession, which could exacerbate the recession by reducing overall demand in the economy.

If a Law Is Passed That Forces the Federal Government