A declining leads to a tax receipt decline and moves the government's budget from surplus toward deficit.

Answer 1

A declining economy leads to a tax receipt decline and moves the government's budget from surplus toward deficit. When an economy slows down, individuals and businesses tend to earn less, which can result in lower income tax revenues, reduced profits, and lower sales tax collections. This can create a budgetary shortfall for the government, especially if expenditures remain the same or increase.