During a recession, rising transfer payments and falling tax collections
I. help cushion households from the impact of the recession.
II. buffers the fall in real GDP (relative to a situation where transfer payments do not rise and tax revenues do not fall).
III. tend to increase a budget deficit or reduce a budget surplus.

Question

During a recession, rising transfer payments and falling tax collections 
I. help cushion households from the impact of the recession.
II. buffers the fall in real GDP (relative to a situation where transfer payments do not rise and tax revenues do not fall).
III. tend to increase a budget deficit or reduce a budget surplus.

Quizplus · Accepted Answer

During a recession, rising transfer payments and falling tax collections
I. help cushion households from the impact of the recession.
II. buffers the fall in real GDP (relative to a situation where transfer payments do not rise and tax revenues do not fall) .
III. tend to increase a budget deficit or reduce a budget surplus.

During a Recession, Rising Transfer Payments and Falling Tax Collections