Automatic Stabilizers Cause a Smaller Budget Deficit (Larger Budget Surplus)

question 61

True/False

Automatic stabilizers cause a smaller budget deficit (larger budget surplus) during recessionary periods and a larger deficit (smaller surplus) during expansionary periods.

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Definitions:

Maturing

The process by which a financial instrument reaches its due date and the principal is required to be repaid.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the principal.

Economic Equivalent

A financial concept that refers to the equivalence in value between different sums of money received or paid at different times, based on a specified interest rate.

Previous March

Refers to March of the preceding year or the last March that occurred before the current date.