Asked by Nikki Malkovits on Mar 10, 2024
Verified
During recessions, the government tends to run a budget deficit.
Budget Deficit
A situation where a government's expenditures exceed its revenues over a specific period of time.
- Acquire knowledge on the operation of automatic stabilizers, including unemployment insurance and welfare programs, in times of recession.
- Master the concepts of how fiscal and monetary policies are instrumental in upholding economic stability.
Verified Answer
DP
Dipen PatelMar 10, 2024
Final Answer :
True
Explanation :
During recessions, government revenues often decrease due to lower tax incomes, while spending increases due to higher demand for public services and potential stimulus measures, leading to budget deficits.
Learning Objectives
- Acquire knowledge on the operation of automatic stabilizers, including unemployment insurance and welfare programs, in times of recession.
- Master the concepts of how fiscal and monetary policies are instrumental in upholding economic stability.
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