A government budget surplus during the boom stage is likely.

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Multiple Choice

A government budget surplus during the boom stage is likely.

Explanation:
During a boom, government budget balances tend to improve because higher incomes and profits push up tax revenues while unemployment falls and welfare spending declines. With more tax receipts and fewer automatic stabilizer outlays, the government is more likely to run a surplus, assuming there isn’t offsetting expansionary policy or unusually high discretionary spending. In other words, the typical pattern in a strong economy is a stronger budget balance, often a surplus, which is why this statement is considered true.

During a boom, government budget balances tend to improve because higher incomes and profits push up tax revenues while unemployment falls and welfare spending declines. With more tax receipts and fewer automatic stabilizer outlays, the government is more likely to run a surplus, assuming there isn’t offsetting expansionary policy or unusually high discretionary spending. In other words, the typical pattern in a strong economy is a stronger budget balance, often a surplus, which is why this statement is considered true.

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