If There Are Automatic Stabilizers but No Deliberate Action by Policymakers

question 18

Multiple Choice

If there are automatic stabilizers but no deliberate action by policymakers, how would government expenditures and taxes change as output falls?

• A) Both government expenditures and taxes fall.
• B) Both government expenditures and taxes rise.
• C) Government expenditures rise and taxes fall.
• D) Government expenditures fall and taxes rise.

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Definitions:

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