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

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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