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

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Definitions:

Month-start Payments

Payments that are due at the beginning of each month.

Retirement Plan

A retirement plan is a financial strategy designed to provide individuals with income or support upon retiring from active employment.

Compounded Monthly

Interest calculation method where interest is added to the principal sum at the end of each month, with each following month's interest calculated on the new total.

Quarterly Payments

Payments made every three months over the course of a year.