[Related to Solved Problem 16.6 on page 587] A 2015 article in the Wall Street Journal noted that an official of the European Union was forecasting that “Greece faces two years of recession amid sharp...

[Related to Solved Problem 16.6 on page 587] A 2015

article in the Wall Street Journal noted that an official of the

European Union was forecasting that “Greece faces two

years of recession amid sharp budget cuts.” What typically happens to a government’s budget deficit during a

recession? Do governments typically respond with budget

cuts as the Greek government did? Briefly explain.

Source: Gabriele Steinhauser and Andrea Thomas, “Greece Faces

Two-Year Recession amid Bailout Cuts,” Wall Street Journal, August 13,

2015.