The automatic budget surpluses and budget deficits that occur in the federal budget over the business cycle
A)destabilize the economy.
B)stabilize the economy.
C)decrease potential GDP.
D)increase potential GDP.

Question

Quizplus · Accepted Answer

Automatic budget surpluses during periods of economic expansion and budget deficits during periods of economic recession can help stabilize the economy by providing the government with the flexibility to increase spending during downturns and reduce spending during upswings. This can help to smooth out the business cycle and avoid extreme fluctuations in economic activity.

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