British Columbia passed a balanced budget law in 2001, and in February 2009, the provincial government announced that it would amend the law to allow deficit spending. CBC news reported that "[then BC Finance Minister Colin] Hansen and [then] Premier Gordon Campbell announced at a joint press conference that provincial revenues have fallen prey to the worldwide economic meltdown." Do you think that nothing is more important than a balanced budget, as was stated by British Columbia's initial law, or do you think it was reasonable to amend the law for fiscal flexibility?"BC's Balanced Budget Law to Allow 2 Years of Deficits," CBC

News,

February 9, 2009,

http://www.cbc.ca/opens in a new tab.

Part 2In the context of what was happening in the economy in 2009, it was more important to

A.

provide fiscal flexibility as this was the only way to help stimulate the Canadian economy in the short term after lowering the interest rates.

B.

balance the budget because the balanced federal budget serves as an automatic stabilizer of the economy.

C.

provide fiscal flexibility because this stimulates automatic stabilizers to "turn on" and causes a decrease in the price level.

D.

balance the budget because this will require the government to raise taxes or cut spending improving the economic situation.