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:

Programs

Software applications designed to perform specific tasks or functions on a computer or device.

Input

Data or signals that are entered into a system or device for processing or control purposes.

Device Memory

The physical hardware components within a device (such as RAM or storage) used to store data temporarily or permanently.

Cache

A hardware or software component that stores data so future requests for that data can be served faster.