The Presence of the Automatic Stabilizers Means an Increase in the Budget

question 50

True/False

The presence of the automatic stabilizers means an increase in the budget deficit will be automatically experienced during an economic expansion whereas a budget surplus will be automatically experienced during a recession.

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Definitions:

Government Policies

Measures and regulations implemented by a government to influence economic, social, or administrative outcomes in the country.

Government Intervention

Actions taken by a government to influence or directly control economic activities, often to correct market failures or promote economic stability.

Promote Efficiency

To enhance the effectiveness and productivity with which resources are used, minimizing waste and maximizing output.

Foreign Competition

Competition that domestic companies face from abroad, from foreign companies offering the same or similar products or services.