Why is the budget philosophy Keynes supports politically difficult to achieve? Group of answer choices -Keynes's budget philosophy requires surpluses during recessions and deficits during expansions. This is difficult because during recessions governments usually don't run surpluses. -Keynes's budget philosophy states that a government should balance its budget each fiscal year. However, politically this is difficult, because during recessionary years tax revenue usually decreases. -It is not always clear what constitutes a business cycle. In some years, GDP rises, and we may still be in a recession. -Keynes recommends that government run surpluses during expansions. Politically, it is difficult to achieve a surplus. For a surplus to occur, we would need politicians to raise taxes and lower government spending. Politicians usually raise government spending, not lower it.
Why is the budget philosophy Keynes supports politically difficult to achieve? Group of answer choices -Keynes's budget philosophy requires surpluses during recessions and deficits during expansions. This is difficult because during recessions governments usually don't run surpluses. -Keynes's budget philosophy states that a government should balance its budget each fiscal year. However, politically this is difficult, because during recessionary years tax revenue usually decreases. -It is not always clear what constitutes a business cycle. In some years, GDP rises, and we may still be in a recession. -Keynes recommends that government run surpluses during expansions. Politically, it is difficult to achieve a surplus. For a surplus to occur, we would need politicians to raise taxes and lower government spending. Politicians usually raise government spending, not lower it.
Chapter16: Expectations Theory And The Economy
Section: Chapter Questions
Problem 8QP
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Question
Why is the budget philosophy Keynes supports politically difficult to achieve?
Group of answer choices
-Keynes's budget philosophy requires surpluses during recessions and deficits during expansions. This is difficult because during recessions governments usually don't run surpluses.
-Keynes's budget philosophy states that a government should balance its budget each fiscal year. However, politically this is difficult, because during recessionary years tax revenue usually decreases.
-It is not always clear what constitutes a business cycle. In some years, GDP rises, and we may still be in a recession.
-Keynes recommends that government run surpluses during expansions. Politically, it is difficult to achieve a surplus. For a surplus to occur, we would need politicians to raise taxes and lower government spending. Politicians usually raise government spending, not lower it.
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