Question

Recall that the shaded areas in the FRED graph indicate recessions. How did current receipts (from taxation) change during the 2008-2009 recession? How did current expenditures change during the 2008-2009 recession?

Answer 1

During the 2008-2009 recession, current receipts (from taxation) decreased, and current expenditures increased.

Step-by-step explanation:

During the 2008-2009 recession, current receipts (from taxation) decreased. As the economy contracted, people and businesses earned less income, resulting in lower tax revenues. This decrease in tax collections contributed to the enormous deficits experienced during the recession.

On the other hand, current expenditures increased during the recession. The government implemented various support programs to aid individuals and businesses affected by the recession. These programs, such as unemployment benefits and economic stimulus packages, led to higher government spending.