The Main Reason That the Deficit Grows in a Recession

question 6

Multiple Choice

The main reason that the deficit grows in a recession is that

• A) the government reacts quickly and adjusts taxes to compensate.
• B) monetary policy that targets interest rates causes the costs of borrowing to fall.
• C) the deficit causes the recession, and reducing the deficit cures the recession.
• D) many forms of taxes act as automatic stabilizers.

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Definitions:

High-Level

Refers to abstract, complex or strategic thinking or reasoning that involves comprehensive analysis or synthesis of information.

Low-Level

Pertaining to basic or rudimentary aspects of a process or operation, often without involving complexities.

Autonomy

The quality or state of being self-governing; the ability to make one's own choices and decisions independently.

Concrete Goal

a clear, specific, and achievable target or objective that someone aims to reach.