When the economy enters a recession, automatic stabilizers create:
A) higher taxes.
B) more discretionary spending.
C) budget deficits.
D) budget surpluses.

Question

Quizplus · Accepted Answer

During a recession, automatic stabilizers such as unemployment benefits and progressive income taxes reduce the government's tax revenues and increase its spending on welfare programs, thereby creating budget deficits.

When the Economy Enters a Recession, Automatic Stabilizers Create