Question

question 14 5 pts during a period of grave financial crisis in the united states, congress is pressured to raise the limit on the maximum amount of money the government can borrow. congress increases the limit on the condition that it will implement sharp tax hikes and across - the - board spending cuts to compensate for the raise and to ensure that the overall budget deficit decreases. in this scenario, the measures implemented by congress will most likely create a(n) -------. fiscal cliff reserve requirement debt ceiling earmark

Explanation:

A fiscal cliff occurs when there are sudden tax increases and spending cuts. In the described scenario, Congress is implementing sharp tax hikes and across - the - board spending cuts, which is characteristic of a fiscal cliff situation. A reserve requirement is related to banks' reserve holdings, a debt ceiling is the borrowing limit (already raised here), and an earmark is a specific spending provision.

Answer:

A. fiscal cliff