An annually balanced federal budget ________ macro- stabilization policy by requiring ________ fiscal policy during recessions.

Question

Quizplus · Accepted Answer

An annually balanced federal budget inhibits macro-stabilization policy by requiring tighter fiscal policy during recessions. By balancing the budget annually, the government does not have the flexibility to increase spending during times of recession, which could help stimulate the economy. Instead, they must reduce spending or increase taxes, which can worsen the recession.

An Annually Balanced Federal Budget ________ Macro- Stabilization Policy by Requiring