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 can be destabilizing because it requires the government to cut spending or raise taxes during a recession to maintain a balanced budget, which can exacerbate economic downturns.

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