An Annually Balanced Government Budget Is a Difficult Policy Goal

question 104

Multiple Choice

An annually balanced government budget is a difficult policy goal to achieve because

• A)a significant portion of the government's budget is beyond the short-term discretion of the federal government.
• B)government has little control over interest-rate charges on its debt during a fiscal year.
• C)tax revenues automatically rise during economic booms and fall during recessions.
• D)transfer payments rise during recessions and fall during economic booms.
• E)All of the above are reasons why a balanced budget is difficult to achieve.

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Definitions:

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