Economists tend to be critical of any balanced budget legislation that would force governments to override automatic stabilizers and __________ spending or __________ taxes in recessions to avoid deficits.

Question

Quizplus · Accepted Answer

Economists tend to believe that in recessions, governments should increase spending or decrease taxes to stimulate the economy, which may lead to temporary deficits. A balanced budget legislation that forces governments to decrease spending or increase taxes in recessions may worsen the economic situation and could be counterproductive. Therefore, economists tend to be critical of any legislation that overrides automatic stabilizers and forces governments to reduce spending or increase taxes in recessions. Thus, the best answer is D- decrease;increase.

Economists Tend to Be Critical of Any Balanced Budget Legislation