During an economic expansion, automatic stabilizers:
A)reduce both budget surpluses and deficits.
B)reduce a budget surplus or increase a deficit.
C)reduce a budget deficit or increase a surplus.
D)increase both budget surpluses and deficits.

Question

Quizplus · Accepted Answer

Automatic stabilizers work by reducing a budget deficit (through increased tax revenues and decreased welfare spending) or increasing a surplus (due to higher tax revenues and lower welfare payments) during times of economic expansion.

During an Economic Expansion, Automatic Stabilizers