Which of the following is true of automatic stabilizers?
A) They increase aggregate demand during a recession and decrease aggregate demand during an economic expansion
B) They decrease aggregate demand during a recession and increase aggregate demand during an economic expansion
C) They do not have any effect on aggregate demand during a recession but increase aggregate demand during an economic expansion
D) They decrease aggregate demand during a recession but do not have any effect on aggregate demand during an economic expansion.
E) They decrease the price level during a recession but do not have any effect on the price level during an economic expansion.
Correct Answer:
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