A Rule That the Government Must Balance the Cyclically Adjusted

question 10

Multiple Choice

A rule that the government must balance the cyclically adjusted budget would I: allow the government to carry on a limited countercyclical fiscal policy.II: keep the debt-to-GDP ratio from rising in the long run.

• A) I is true; II is not.
• B) II is true; I is not.
• C) Both I and II are true.
• D) Neither I nor II is true.

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