Automatic Stabilizers Are Designed So That as Income Falls

question 276

Multiple Choice

Automatic stabilizers are designed so that as income falls

• A) government spending falls so that the budget is always balanced.
• B) spending rises to a degree that a recession automatically ends.
• C) the rate of a decrease in spending accelerates.
• D) spending does not fall as much as income.

---

Definitions:

Consumption Goods

Goods that are used by consumers for personal use and satisfaction, not for production or investment.

Lollipops

A hard candy on a stick.

Candy Bars

Small confectionery items often consisting of chocolate and various fillings or toppings.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given income and prices.