For various reasons, fiscal policy changes automatically when output and employment
Chapter 34, Problem Problems and Applications 34.12(choose chapter or problem)
For various reasons, fiscal policy changes automatically when output and employment fluctuate. a. Explain why tax revenue changes when the economy goes into a recession. b. Explain why government spending changes when the economy goes into a recession. c. If the government were to operate under a strict balanced-budget rule, what would it have to do in a recession? Would that make the recession more or less severe?
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