As the economy contracts, tax revenues:
A) fall and transfer payments rise, causing the economy to contract by less than it would in the absence of automatic stabilizers.
B) rise and transfer payments rise, causing the economy to contract by more than it would in the absence of automatic stabilizers.
C) fall and transfer payments fall, causing the economy to contract by more than it would in the absence of automatic stabilizers.
D) rise and transfer payments fall, causing the economy to contract by less than it would in the absence of automatic stabilizers.
Correct Answer:
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Q66: During an economic contraction, automatic stabilizers:
A)reduce both
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Q68: Which of the following policies would reduce
Q69: During an economic expansion, automatic stabilizers:
A)reduce both
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A)reduce cyclical fluctuations in the
Q76: An example of a procyclical fiscal policy
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