Due to automatic stabilizers, when the nation's total income rises, government transfer spending:
A) Increases and tax revenues decrease
B) Decreases and tax revenues increase
C) And tax revenues decrease
D) And tax revenues increase

Question

Quizplus · Accepted Answer

Automatic stabilizers work to counteract economic fluctuations. When total income rises, transfer payments like unemployment benefits decrease, and tax revenues increase due to higher incomes.

Due to Automatic Stabilizers, When the Nation's Total Income Rises