The automatic budget surpluses and budget deficits that occur in the federal budget over the business cycle

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Automatic budget surpluses and deficits help to stabilize the economy by serving as automatic stabilizers. During economic expansion, tax revenues increase and government spending decreases, resulting in a surplus. During times of economic downturns, tax revenues decrease and government spending increases, resulting in a deficit. These automatic changes in the budget help to moderate the business cycle's amplitude, reducing potential economic instability.

The Automatic Budget Surpluses and Budget Deficits That Occur in the Federal