1) The government wants to keep the economy stable. It increases its spending whenindividual and business spendingdrops. This is called

(a) cyclically balanced fiscal policy

(b) balanced budget fiscal policy

(c) cyclical fiscal policy

(d) counter-cyclical fiscal policy

2) Which is a disadvantage of a balanced budget fiscal policy?

(a) It can increase government debt over time

(b) it decreases the recessionary gap

(c) it can make the business cycle more extreme

(d) it creates structural deficits