If There Are Automatic Stabilizers but No Deliberate Action by Policymakers

question 18

Multiple Choice

If there are automatic stabilizers but no deliberate action by policymakers, how would government expenditures and taxes change as output falls?

• A) Both government expenditures and taxes fall.
• B) Both government expenditures and taxes rise.
• C) Government expenditures rise and taxes fall.
• D) Government expenditures fall and taxes rise.

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Definitions:

Chronic

Describing a condition or disease that is long-lasting or recurrent, often requiring ongoing management.

Phantom Limb Pain

Pain that feels like it's coming from a body part that's no longer there, commonly experienced after an amputation.

Amputated

The surgical removal of all or part of a limb or extremity such as an arm, leg, foot, hand, toe, or finger, often as a result of injury, disease, or surgery.

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