Because of Automatic Fiscal Policy, When Real GDP Decreases

question 73

Multiple Choice

Because of automatic fiscal policy, when real GDP decreases

• A)government expenditures increase and tax revenues decrease.
• B)the economy will automatically go to full employment.
• C)government expenditures equal tax revenues.
• D)government expenditures decrease and tax revenues increase.

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Definitions:

Subdivisions

The act of dividing something into smaller parts or sections.

Home Prices

Refers to the cost at which houses are bought and sold in the real estate market.

Null Hypothesis

A default hypothesis in statistical inference that suggests no statistical significance or effect exists within a set of observations.

Significance Level

A threshold in hypothesis testing that determines the probability of rejecting the null hypothesis when it is actually true, commonly denoted as alpha (α).