1- Congress will automatically change the tax structure and expenditure programs to correct upswings and downswings in business activity.
3- with given tax rates and expenditures policies, a rise in domestic income will reduce a budget deficit or produce a budget surplus while a decline in income will result in a deficit or a lower budget surplus.
4- government expenditures and tax receipts automatically balance over the business cycle, though they may be out of balance in any single year.
5- an annually balanced budget will offset the procyclical tendencies created by state and local finance and thereby stabilize the economy.
ANSWER:
3- with given tax rates and expenditures policies, a rise in domestic income will reduce a budget deficit or produce a budget surplus while a decline in income will result in a deficit or a lower budget surplus.