During Expansions, What Do Automatic Stabilizers Make Government Expenditures and Taxes

question 120

Multiple Choice

During expansions, what do automatic stabilizers make government expenditures and taxes do?

• A) They make government expenditures and taxes fall.
• B) They make government expenditures and taxes rise.
• C) They make government expenditures rise and taxes fall.
• D) They make government expenditures fall and taxes rise.

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Definitions:

Minimum-Wage Law

A regulation that sets the lowest hourly wage a worker can legally be paid.

Negative Income Tax

A proposed system where individuals earning below a certain amount receive supplemental pay from the government instead of paying taxes.

Earned Income Tax Credit (EITC)

A refundable tax credit for low- to moderate-income working individuals and families, aimed at reducing the tax burden and encouraging employment.

Utilitarianism

A theory in normative ethics holding that the best action is the one that maximizes utility, generally defined as that which produces the greatest well-being of the greatest number of people.