Which of the following is an argument against balancing the federal budget?
A)The economy will self-adjust so deficit spending is not necessary.
B)An increase in government spending and taxes by the same amount does not affect income.
C)Doing so may prevent the government from pulling the economy out of recession.
D)None of the choices are correct.

Question

Quizplus · Accepted Answer

Balancing the federal budget during a recession may prevent the government from implementing necessary fiscal policies to stimulate the economy. Deficit spending can be beneficial in jumpstarting economic growth and creating jobs. A sudden reduction in government spending, which may be necessary to balance the budget, could worsen the recession and lead to further economic contraction.

Which of the Following Is an Argument Against Balancing the Federal