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Definition

Balanced Budget Laws

Balanced Budget Laws are laws (usually passed by right-wing governments) which require governments to run balanced budgets regardless of the state of the overall economy. These laws 2 have the negative effect of worsening economic downturns – since governments either must
reduce spending or increase taxes during a recession, in order to offset the impact of the recession on its budget, and those fiscal actions deepen the recession.

Category: Economics
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