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If the Economy Dips into a Recession

Question 107

Multiple Choice

If the economy dips into a recession


A) automatic stabilizers will cause tax receipts to fall and transfer payments to rise.
B) automatic stabilizers will cause tax receipts to rise and transfer payments to fall.
C) discretionary fiscal policy will generate increased transfer payments and lower tax receipts.
D) discretionary fiscal policy will reduce government outlays and increase tax receipts.
E) nothing will happen to the federal budget unless the President and Congress take specific corrective action.

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