A Constitutional amendment requiring that the federal government budget be balanced annually would have
A) an automatic stabilizing impact upon the economy.
B) an automatic destabilizing impact upon the economy.
C) overall neutral impact upon the economy.
D) overall positive impact upon the economy during any stage of a business cycle.

Question

Quizplus · Accepted Answer

A constitutional amendment requiring the federal government budget to be balanced annually would have an automatic destabilizing impact upon the economy. This is because the government budget would have to be cut drastically during economic downturns, which could worsen the recession. Furthermore, such an amendment could limit the government's ability to respond to unexpected economic events or natural disasters, leading to further economic destabilization.

A Constitutional Amendment Requiring That the Federal Government Budget Be