Question

You are an economic adviser to a candidate for national office. She asks you for a summary of the economic consequences of a balanced-budget rule for the federal government and for your recommendation on whether she should support such a rule. How do you respond?

Answer 1

Do not support such rule. This is the right answer

Answer 2

Recommendation: Do not support such rule

Step-by-step explanation:

This type of budget rules restrain governments from employing taxes and transfers as automatic stabilizers. This due to the fact that these rules tend to bring deficits and surpluses.