A balanced budget would not affect income because an increase in government spending is exactly matched by an increase in taxes.

Question

Quizplus · Accepted Answer

A balanced budget means that government spending is equal to government revenue, so there would be no increase in government spending. Therefore, there would be no need for an increase in taxes to match the increase in spending. A balanced budget would likely involve some combination of spending cuts and tax increases to reach the balance.

A Balanced Budget Would Not Affect Income Because an Increase