When the economy is in a recession,________ taxes decrease while ________ spending increases and,as a result of this automatic fiscal policy,aggregate demand ________.

Question

Quizplus · Accepted Answer

During a recession, induced taxes (like income taxes) decrease as incomes fall, while needs-tested spending (like unemployment benefits) increases automatically, leading to an increase in aggregate demand.

When the Economy Is in a Recession,________ Taxes Decrease While