If there is a constitutional requirement to maintain a balanced budget, then during a recession when tax revenues are shrinking, the government will have to implement:

Question

Quizplus · Accepted Answer

A balanced budget requirement means the government cannot spend more than its income. During a recession, tax revenues fall, so to maintain a balanced budget, the government would need to cut spending or increase taxes, which are contractionary fiscal measures.

If There Is a Constitutional Requirement to Maintain a Balanced