The Provisions in State Constitutions Requiring Them to Balance Their

Multiple Choice

The provisions in state constitutions requiring them to balance their budgets mean that:

A) state governments often behave procyclically because lower revenues during recessions means lower state spending.
B) state government spending acts as an automatic stabilizer for the national economy.
C) state governments can follow a functional finance approach with greater consistency than the federal government, which has no such requirement.
D) state governments can only use monetary policy to affect their economies.