The federal government deficit or surplus

A) is not affected by the level of GDP.
B) is not affected by discretionary fiscal policy.
C) may be more a symptom of economic distress than a result of intentional fiscal policy.
D) should be balanced at all times to prevent business cycles.

Question

Baylee Lundgren · Accepted Answer

Final Answer : C, Explanation :  The federal government deficit or surplus may be more a symptom of economic distress than a result of intentional fiscal policy. Economic downturns can lead to decreased tax revenue and increased government spending on safety net programs, which can result in a higher deficit. Conversely, economic upswings can lead to increased tax revenue and decreased government spending on safety net programs, which can result in a surplus. It is important for the government to be mindful of the deficit/surplus and its potential impact on the economy, but a balanced budget at all times may not be feasible or desirable.

The federal government deficit or surplus

A) is not affected by the level of GDP.
B) is not affected by discretionary fiscal policy.
C) may be more a symptom of economic distress than a result of intentional fiscal policy.
D) should be balanced at all times to prevent business cycles.

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Learning Objectives

Learning Objectives

Related questions

The federal government deficit or surplusA) is not affected by the level of GDP.B) is not affected by discretionary fiscal policy.C) may be more a symptom of economic distress than a result of intentional fiscal policy.D) should be balanced at all times to prevent business cycles.

Definitions

Learning Objectives

Learning Objectives

Related questions

The federal government deficit or surplus

A) is not affected by the level of GDP.
B) is not affected by discretionary fiscal policy.
C) may be more a symptom of economic distress than a result of intentional fiscal policy.
D) should be balanced at all times to prevent business cycles.