Question

One reason for not requiring a balanced federal budget at all times is that with a balanced-budget rule:_________.

a. the distorting features of the tax system are minimized.
b. it is possible to shift the burden of a war from current to future generations.
c. expenditures are not limited because, if the government wants to raise expenditures, it just raises taxes.
d. in a recession the automatic stabilizing powers of our system of taxes and transfers could not work.

Answer 1

d. in a recession the automatic stabilizing powers of our system of taxes and transfers could not work.

Step-by-step explanation:

A balanced government expenditure is when government spending equals government revenue.

most times, the government doesn't have a balanced budget. it either has a surplus or a deficit.

When there is a recession, automatic stabilisers - progressive tax and transfer payment - may not be adequate to lift the economy out of recession. So, the government would have to spend more than it receives from taxes to revive the economy. in this case there would be a deficit