A recession tends to cause the federal budget deficit to ________ because tax revenues ________ and government spending on transfer payments ________.

Question

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During a recession, tax revenues typically fall due to decreased economic activity and unemployment. However, government spending on transfer payments such as unemployment benefits and food stamps tends to increase as more people require assistance. This leads to an increase in the federal budget deficit.

A Recession Tends to Cause the Federal Budget Deficit to ________