As income increases during the recovery from a recession, automatic stabilizers will:
A) increase taxes and increase government spending, increasing the overall size of the government.
B) reduce taxes and increase government spending, accelerating the recovery.
C) increase taxes and decrease government spending, slowing the recovery.
D) reduce taxes on high-income individuals and raise taxes on the poor, increasing economic inequality.
Correct Answer:
Verified
Q76: An example of a procyclical fiscal policy
Q77: In terms of fiscal policy, which of
Q78: If output is falling, a procyclical fiscal
Q79: As the economy expands, tax revenues:
A)fall and
Q80: Automatic stabilizers cause:
A)deeper recessions and more rapid
Q82: Property taxes are:
A)not an automatic stabilizer because
Q83: It is generally true that elected officials
Q84: Suppose the government never borrows, so that
Q85: If an economy is above potential output
Q86: If income increases, a budget deficit will:
A)tend
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