During recessions or economic downturns, state and local governments O can dip into contingency or "rainy day" funds set up by the states. O need not balance their budgets as they can raise taxes retroactively if revenues fall short of expenditures. O need to create realistic revenue budgets because they need to balance spending with their revenue receipts. Any shortfalls in revenues usually result in spending cuts. O need not accurately forecast revenue receipts as the federal government will step in to pick up the slack
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The options are: 1. can dip into contingency or "rainy day" funds set up by the states. 2. need not balance their budgets as they can raise taxes retroactively if revenues fall short of expenditures. 3. need to create realistic revenue budgets because they need to Show more…
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