Why would a budget approved by Congress incur a larger deficit if a recession occurred after the budget was passed?
A) Government purchases of goods and services will increase to accommodate the higher tax revenues.
B) The automatic stabilizers will push the budget toward a deficit.
C) The high-employment budget was not correctly estimated.
D) Political pressures will cause spending levels to be higher than budgeteD.
Correct Answer:
Verified
Q204: Deliberate changes in government expenditures and taxes
Q205: The multiplier effect tends to
A)decrease upswings and
Q206: If full employment GDP is greater than
Q207: The federal debt
A)is the current total of
Q208: Fiscal policy influences the levels of income
Q210: Which statement is true?
A)Both unemployment compensation and
Q211: Since 1980,the public debt has
A)remained constant absolutely,but
Q212: Automatic stabilizers
A)are programs which require legislative action.
B)are
Q213: Nondiscretionary fiscal policy
A)entails legislative changes in government
Q214: As the MPC rises,the multiplier
A)will rise.
B)will fall.
C)will
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents