The budget deficit decreases during economic booms and increases during recessions.

Question

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During economic booms, there is higher employment and income, which leads to increased tax revenues and decreased spending on programs such as unemployment benefits. On the other hand, during recessions, there is higher unemployment and lower income, which leads to decreased tax revenues and increased spending on programs such as unemployment benefits. This results in an increase in the budget deficit.

The Budget Deficit Decreases During Economic Booms and Increases During