Econ budget questions?

Question

1) Fiscal conservatives favor an annually balanced budget primarily because they:

a. believe the private sector is inherently unstable

b. believe the public debt will soon cause the Federal government to go bankrupt

c. believe deficit financing leads to an undesirable expansion of the public sector of the economy

d. fear interest payments on the debt will increase income inequality

2) A major criticism of a cyclically balanced budget is that:

a. tax revenues automatically fall in recessions, but do not automatically increase in expansions

b. automatic (built-in) stabilizers are so effective that discretionary fiscal policy is unnecessary

c. such a policy has an inflationary bias

d. upswings and downswings of the business cycle are not always of equal magnitude and duration

All help would be greatly appreciated. Thank you!

Answer 1

1. C, they prefer lower taxes and a smaller government

2. I think D...