What Happens to Deficits During Recessions

question 148

Multiple Choice

What happens to deficits during recessions?

• A) They increase, because tax revenues decline while spending programs increase.
• B) They decrease, because tax revenues decline while spending programs decrease.
• C) They increase, because personal income and corporate profits increase, boosting tax revenue.
• D) They decrease because personal income and corporate profits increase, boosting tax revenue.
• E) They decrease during recessions and increase during expansions.

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Definitions:

Monthly Rent

Refers to the periodic payment made to a landlord or property owner for the use of a residence or commercial space.

One-Bedroom Apartments

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Central Limit Theorem

A statistical theory stating that the distribution of sample means approximates a normal distribution as the sample size becomes large, regardless of the population's distribution.

Sampling Distribution

A statistical distribution derived from numerous samples taken from a particular population.