Automatic stabilisers decrease the impact of a recession on the level of economic activity because they
A) mean disposable income does not change by as much as real GDP.
B) reduce the interest rate and so allow firms to increase their level of investment.
C) increase the quantity of money in circulation.
D) raise the exchange rate so Australian exports become more attractive to foreigners.
E) increase taxes so the budget is always balanced.
Correct Answer:
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