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A) What happens during recessions to the deficit, government spending, and tax receipts, all as a...

A) What happens during recessions to the deficit, government spending, and tax receipts, all as a percentage of GDP?

B) What seems to be more important for rising deficits in recessions: higher spending or lower taxes?

C) What reasons are there for these patterns in these measures during recessions?

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1 deficit rises, government expenditure rises and tax receipts fall as percentage of gdp

2 lower taxes because only few countries use keynesian advice vigorously

3 deficit rises because as incomes and spending fall which reduces taxes and on the other hand Govt expenditure rises, expenditure rises because of increase in unemployment payments and Govts efforts to increase Aggregate demand, tax receipts fall due to fall in incomes and expenditures of people

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