Home › CBSE Class 12 (Arts) › Economics › Government Budget and the Economy › Without any change in fiscal policy, the budget …
Without any change in fiscal policy, the budget deficit tends to
Avanish in a boom only
Brise in a recession
Cstay constant always
Dfall in a recession
Answer & Solution
Correct answer: B. rise in a recession
In a recession GDP falls and so does tax revenue, which enlarges the deficit even with no policy change.
Related questions
Since 1997-98, which deficit measure has no longer been shown in India's budget?A high fiscal deficit need not be inflationary whenA common criticism of deficits is that they areDebt owed to foreigners is a real burden becauseGovernment bonds competing with corporate bonds for savings can push out private borrowersUnder Ricardian equivalence, higher government dissaving from a deficit leads toWho first argued that people save more when faced with high deficits, giving Ricardian equDeficits are a flow while government debt is a