APFIVE State Balanced Budgets and Federal Fiscal Policy
How might the requirement for many state and local governments to balance their budgets impact the effectiveness of federal fiscal policy during a recession?
A
It has no significant impact on federal fiscal policy as state and local budgets are relatively small
B
It enhances the effectiveness of federal fiscal policy by providing a stabilizing force in the economy
C
It may counteract federal expansionary fiscal policy by forcing state and local governments to cut spending or raise taxes
D
It amplifies the effects of federal fiscal policy by encouraging state and local governments to increase borrowing
Question Leaderboard
Not enough data yet to show leaderboard.