Suppose the Government Wants to Maintain a Balanced Budget

question 256

Multiple Choice

Suppose the government wants to maintain a balanced budget.To achieve this goal,when the economy falls into recession government would need to ________ taxes,which would cause aggregate demand to ________.

• A)decrease; decrease
• B)decrease; increase
• C)increase; decrease
• D)increase; increase

---

Definitions:

Privity of Contract

A doctrine in contract law stating that only parties involved in the contract have the right to sue or be sued on its terms.

Assignments

The transfer of rights, property, or responsibilities from one party to another, often used in the context of legal and academic settings.

Contractual Relationship

A legal bond between parties, created by an agreement, that outlines rights and obligations.

Parol Evidence Rule

A principle that courts will not permit outside evidence to contradict clear wording of a contract.