Generally speaking, when an economy is in a recession, the government finds it is running a Blank 1 Question 3 budget deficit . If the government were to try to balance the budget in these circumstances (by Blank 2 Question 3 decreasing government spending or Blank 3 Question 3 increasing taxes) the effect would be to Blank 4 Question 3 decrease aggregate demand, thus Blank 5 Question 3 decreasing GDP. In other words, the recession will get Blank 6 Question 3 worse , i.e. the action of the government pushes the economy Blank 7 Question 3 further in the direction it was heading. Similarly, when an economy is experiencing an inflationary boom period, the government generally finds that it has a Blank 8 Question 3 budget surplus . If it attempts to reduce the Blank 9 Question 3 budget surplus by Blank 10 Question 3 increasing government spending or Blank 11 Question 3 decreasing taxes, the effect will be to Blank 12 Question 3 increase aggregate spending, thus pushing the economy Blank 13 Question 3 further in the direction it was heading