An Attempt to Maintain an Annually Balanced Budget Would

question 19

Multiple Choice

An attempt to maintain an annually balanced budget would

• A)destabilize the economy.
• B)cause output to remain at the full-employment level of real GDP.
• C)stabilize the economy if investment is unaffected by changes in government spending;otherwise the economy will tend to be destabilized.
• D)stabilize the economy.
• E)have no effect on the level of,or the fluctuations in,real GDP.

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