Other things being equal, we would expect government spending to fall and tax receipts to rise as an economy enters an expansionary phase.

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During an expansionary phase, it is expected that economic activity will increase, resulting in higher tax revenues for the government. At the same time, lower levels of unemployment and increased consumer demand can reduce the need for government spending on measures such as unemployment benefits and social welfare programs. Therefore, overall government spending may decrease while tax receipts rise.

Other Things Being Equal, We Would Expect Government Spending to Fall