A Federal Budget Deficit Acts as an Automatic Stabiliser Because

question 114

Multiple Choice

A federal budget deficit acts as an automatic stabiliser because:

• A)government tax revenues decrease during a recession.
• B)unemployment benefit payments decrease during a recession.
• C)tax receipts decrease during expansionary periods.
• D)Medicare payments increase during expansionary periods.

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Definitions:

Tariffs

Taxes imposed by a government on imported or occasionally exported goods, often used to protect domestic industries from foreign competition.

Agricultural Act of 2014

A comprehensive statute that governs United States federal farm programs including crop insurance, conservation programs, and nutritional assistance.

Freedom to Farm Act

U.S. legislation passed in 1996 that aimed to reduce government control over farming operations and allow farmers more freedom in their planting decisions.

Countercyclical Payments

Government payments made to farmers and businesses to provide financial support during periods of economic downturn.