With fixed government expenditure and tax rates, during which economic phases does the government budget deficit increase and during which does it decrease?

Show Answers

economic expansions, economic expansionseconomic downturns, economic downturnseconomic expansions, economic downturnseconomic downturns, economic expansionsnone of the above

Explanation

When government spending and taxes remain unchanged, the budget deficit tends to expand during economic recessions due to lower tax revenues and contracts during economic booms when revenues increase.