The presence of automatic stabilizers means that the federal budget deficit is _______ than it otherwise would be in a recession and _______ than it otherwise would be in an expansion.

Question

Quizplus · Accepted Answer

Automatic stabilizers increase government spending or decrease taxes during a recession, leading to a larger deficit, and decrease spending or increase taxes during an expansion, leading to a smaller deficit.

The Presence of Automatic Stabilizers Means That the Federal Budget