The state of California has a chronic budget deficit. In 2009 and 2010, the state has raised taxes and fees and cut spending, which slowed the economic expansion in this state. The state government is doing this despite the bad economic impact because:

(a) it has a balanced-budget requirement.

(b) it has automatic destabilizers.

(c) it has a progressive tax policy that calls for higher taxes each year.

(d) it had to balance out the Federal tax cuts and increased spending.

The availability of an adverse budget deficit translates to the incorporation of a balanced budget requirement. Option A.

A balanced budget entails an equal measure in the rates of taxes in comparison to the level of government spending. The reason why California it has a budget deficit is for it to enable the economy to run within its means without spending much and incurring bad debts. The state, therefore, has to put up structures that will enable it to have a balanced budget. These structures are outrightly raising the rates of taxes or alternatively lowering the levels of government expenditure to ensure equality in the revenue.