Which of the Following Is an Example of an Automatic

question 56

Multiple Choice

Which of the following is an example of an automatic fiscal policy action?

• A)increased unemployment payments resulting from higher unemployment
• B)an increase in spending on defense goods resulting from increased world tensions
• C)an increase in the tax rate resulting from a desire to shrink the budget deficit
• D)a decrease in the tax rate resulting from an effort to increase aggregate demand to combat a recession
• E)None of the above answers are correct.