If the government faced a balanced budget rule, it would be forced to raise taxes or decrease spending during a recession.

Name: If the government faced a balanced budget rule, it would be forced to raise taxes or decrease spending during a recession.
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Question

If the government faced a balanced budget rule, it would be forced to raise taxes or decrease spending during a recession.​

Quizplus · Accepted Answer

A balanced budget rule requires the government to spend only as much as it earns in revenue, so during a recession, when revenues typically fall, the government would need to raise taxes or cut spending to maintain a balanced budget.

If the Government Faced a Balanced Budget Rule, It Would