If the government projects that negative economic growth will occur over the next few months, the most likely outcome for the federal budget will be:
A) a surplus.
B) a balanced budget.
C) a deficit.
D) contractionary.

Question

Quizplus · Accepted Answer

Negative economic growth typically means there will be a decrease in tax revenue and an increase in government spending on programs such as unemployment benefits. This will result in a deficit for the federal budget.

If the Government Projects That Negative Economic Growth Will Occur