If the government's budget is balanced at the start of a recession,and the government is attempting to stabilize the economy through fiscal policy

A) a budget surplus would be expected.
B) a budget deficit would be expected.
C) government spending,taxes,and transfer payments must all be reduced in a fashion that preserves a balanced budget.
D) it should increase government spending,lower taxes,and increase transfer payments in a manner that preserves a balanced budget.
E) government spending,taxes,and transfer payments must remain unchanged.

Question

Kameron Esters · Accepted Answer

Final Answer : B, Explanation :  During a recession, the government typically increases spending and reduces taxes to stimulate economic activity. This would result in a budget deficit, as the government would be spending more than it is collecting in revenue. Therefore, choice B is the correct answer.

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