It Is Impossible for the Government to Maintain a Balanced

question 116

True/False

It is impossible for the government to maintain a balanced budget while using fiscal policy to eliminate a recessionary gap.
An increase in government spending paid for by a tax increase of equal size shifts aggregate demand to the right through the balanced budget multiplier.Therefore,it may be difficult,but not impossible,to maintain a balanced budget while using fiscal policy to eliminate a recessionary gap.

---

Definitions:

Regional Trade Communities

are groups of neighboring countries that have agreed to significantly reduce or eliminate trade barriers among themselves.

Central America

A geographical region in the Americas bordered by Mexico to the north, the Caribbean to the east, the Pacific Ocean to the southwest, and South America to the southeast.

Europe

A continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere, comprising a variety of countries, cultures, and languages.

Advisory Opinion

An opinion issued by a court or a commission that does not have the effect of adjudicating a specific legal case, but merely advises on the constitutionality or interpretation of a law.