According to mainstream economic analysis, a balanced-budget rule for fiscal policy would be
A)countercyclical.
B)ineffective.
C)destabilizing.
D)pro-growth.

Question

Quizplus · Accepted Answer

A balanced-budget rule requires the government to maintain a budget where expenditures equal revenues, regardless of economic conditions. This can be destabilizing because it prevents the government from using fiscal policy to counteract economic fluctuations, such as increasing spending or cutting taxes during a recession.

According to Mainstream Economic Analysis, a Balanced-Budget Rule for Fiscal