A cyclically-balanced budget philosophy involves all,except one,of the following.Which is the exception?
A)It aims to balance the budget over the life of the business cycle.
B)It requires that governments spend more at times and less at other times.
C)It calls for budget deficits when there is recession and budget surpluses when there is an inflationary gap.
D)It implies that a government balances its budget in each year.

Question

Quizplus · Accepted Answer

A cyclically-balanced budget philosophy allows for deficits and surpluses over the business cycle, so B and C are both consistent with the philosophy. However, the philosophy does not require a government to balance its budget in each individual year, as long as the budget is balanced over the entire business cycle. Therefore, D is the exception.

A Cyclically-Balanced Budget Philosophy Involves All,except One,of the Following