An Increase in the Federal Budget Deficit During a Recession

An increase in the federal budget deficit during a recession serves as an automatic economic stabilizer because:

A) increased transfer payments from unemployment insurance partly offset the fall in household income.
B) lower corporate profits translate into a lower tax load and so investment spending declines slightly less.
C) lower personal income translates into a lower tax load and so consumption spending declines slightly less.
D) All of the above are correct.