Use the figure below to answer the following questions.

Figure 29.3.1
-Refer to Figure 29.3.1, which shows the outlays and revenues for the government of Pianoland. Automatic fiscal policy would be shown as a movement

Question

Use the figure below to answer the following questions.
  
Figure 29.3.1
-Refer to Figure 29.3.1, which shows the outlays and revenues for the government of Pianoland. Automatic fiscal policy would be shown as a movement

Quizplus · Accepted Answer

Automatic fiscal policy involves changes in government revenues and outlays that occur automatically with changes in economic activity, such as tax revenues increasing with higher income or unemployment benefits increasing with higher unemployment. Therefore, it can be represented by movements along both the revenues and outlays curves.

Use the Figure Below to Answer the Following Questions