If government adhered strictly to the idea of an annually balanced budget,then during a recession,

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During a recession, tax collections tend to decrease due to decreased economic activity, while expenditures tend to increase due to increased demand for government services (such as unemployment benefits). If the government adhered strictly to an annually balanced budget, they would have to reduce expenditures and/or increase tax rates to balance the budget. This would exacerbate the recession by reducing overall demand further. Therefore, the best choice is E, which suggests reducing expenditures and/or increasing tax rates to balance the budget during a recession.

If Government Adhered Strictly to the Idea of an Annually