An annually balanced budget:
A)is the surest path to economic stability.
B)is required by the U.S.Constitution.
C)dampens cyclical swings by decreasing government spending during expansions and increasing it during recessions.
D)accentuates cyclical swings by increasing government spending during expansions and reducing it during recessions.
E)is a goal that has only been achieved twice in the past 5 years.

Question

Quizplus · Accepted Answer

An annually balanced budget can accentuate cyclical swings because it involves increasing government spending during economic expansions (when tax revenues are higher) and reducing it during recessions (when tax revenues are lower), which can exacerbate the natural economic cycles.

An Annually Balanced Budget