Question

All of the following reasons are why most economists consider a perpetual balanced budget unrealistic, except:

Select the correct answer below:

A -In the short term, economists would expect the budget deficits and surpluses to fluctuate up and down with the economy and the automatic stabilizers.

B -It is impossible to balance the budget as the government would never reduce spending.

C -A requirement that the budget be balanced each and every year would prevent automatic stabilizers from working.

D -Economic recessions should automatically lead to larger budget deficits or smaller budget surpluses, while economic booms lead to smaller deficits or larger surpluses.

Answer 1

Q-1 ::ANSWER :: (B) It Is Impossible To Balance The Budget As The Government Would Never Reduce Spending

=> Explanation ::

=> Balanced budget Means Government Expenses And Revenue both are Equal In The Budget But it is Rare Because Most Economist Consider A Perpetual Balanced Budget Unrealistic. So Most Of The Country Have Budget Deficit Or Budget Surplus In Their Budget

=> For Balance Budget Government Have to Decrease its Spending  And Increase Taxes. It Is Not Possible For Government To balance Budget Every Year Because Country Has a Large Transaction And Activity And Government Also Have To Spend More Money For Provide Services To Public And Government Did Not Reduce It And Also They Do No Increase Taxes For Maintain Revenue To Expanses.

=> So We Assume That Balance Budget Cause Many Problem And Every Time Government Have To Try To Balance Budget So they Did Not Take Attention On Other Activity in Country So For That Cause Balance Budget Is Unrealistic