Final answer:
A balanced budget amendment would weaken automatic stabilizers by forcing the government to enact counteractive measures during economic fluctuations, potentially exacerbating economic conditions.
Step-by-step explanation:
A balanced budget amendment would have the effect of weakening automatic stabilizers. Automatic stabilizers are economic policies that work without additional government action, like tax collections decreasing during a recession or spending on unemployment benefits increasing.
When the economy goes into recession, a balanced budget amendment would force the government to cut spending or raise taxes to avoid a deficit, counteracting these stabilizers. Similarly, in a boom, the government would be required to lower taxes or increase spending to prevent a surplus. This need to maintain a balanced budget regardless of economic conditions could exacerbate economic fluctuations instead of smoothing them out.