Because of the Automatic Stabilizers, a Decline in the Level

question 142

Multiple Choice

Because of the automatic stabilizers, a decline in the level of economic activity will cause:

• A) a reduction in tax revenues collected.
• B) an increase in government expenditures.
• C) a greater budget deficit.
• D) all of the above.

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Definitions:

Permanent Income

An economic theory suggesting that people's consumption choices are influenced more by their lifetime income expectations than by their current income.

Economic Mobility

The ability of an individual, family, or some other group to improve (or decline) their economic status, typically measured over generations.

Inequality Measurement

The analysis or quantification of disparities in income, wealth, health, or other social and economic dimensions.

Income Distributions

The way in which total income is shared among the population or different segments of the economy.