ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to make sure that the federal government doesn’t give money to nonexempt programs
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to give the federal government the chance to create a budget surplus
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to make sure the federal government can respond to changes in the economy
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to ensure that the federal government is more disciplined about its spending
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Detailed explanation-1: -Balanced budget amendments are defended with arguments that they reduce deficit spending and constrain politicians in making irresponsible short-term spending decisions when they are in office. Research shows that balanced budget amendments lead to greater fiscal discipline.
Detailed explanation-2: -Sen. Lee’s amendment would force Congress to balance its budget each year, limit spending to no more than 18% of GDP, and require a supermajority vote in both the House and Senate before raising taxes or increasing the nation’s debt ceiling.
Detailed explanation-3: -In its simplest form, a balanced budget amendment would add a budget rule to the Constitution that would require federal spending not to exceed federal receipts. The amendment would make it unconstitutional for the federal government to run annual budget deficits.
Detailed explanation-4: -“It goes from being incredibly difficult to practically impossible if you start taking things off the table.” The federal deficit is expected to be so large over the next decade that it would take about $16 trillion in spending reductions or new revenues to balance the budget by 2033.
Detailed explanation-5: -A balanced budget (particularly that of a government) is a budget in which revenues are equal to expenditures. Many economists argue that moving from a budget deficit to a balanced budget decreases interest rates, increases investment, shrinks trade deficits and helps the economy grow faster in the longer term.