The bursting of the dot-com bubble in 2000, along with the terrorist attacks in 2001, made the U.S. government
A) decrease its cyclically adjusted budget deﬁcit from 2000 to 2002.
B) increase its cyclically adjusted budget surplus from 2000 to 2002.
C) increase its cyclically adjusted budget deﬁcit from 2000 to 2002.
D) increase its actual budget surplus from 2000 to 2002.

Question

Quizplus · Accepted Answer

The bursting of the dot-com bubble and the terrorist attacks caused a recession in the early 2000s, which led to a decrease in tax revenues and an increase in government spending on defense and security. As a result, the government's cyclically adjusted budget deficit increased from 2000 to 2002.

The Bursting of the Dot-Com Bubble in 2000, Along with the Terrorist