A Balanced Budget Rule Which Precluded a Deficit in Any

Multiple Choice

A balanced budget rule which precluded a deficit in any fiscal year would

A) stabilize short- and medium-term GDP
B) exacerbate recessions
C) be equivalent to handing fiscal policy to an independent agency, just as monetary policy is handled by an independent central bank
D) create a more predictable environment conducive to investment
E) cause the national debt to rise at the same rate as inflation