During a Recession, Automatic Stabilizers Cause the Federal Deficit to

question 79

Multiple Choice

During a recession, automatic stabilizers cause the federal deficit to

• A) decrease.
• B) either increase or decrease.
• C) remain unchanged.
• D) increase.

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Definitions:

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.

Appreciate

The increase in value of an asset over time.

Canadian Dollar

The official currency of Canada, symbolized as CAD and often referred to as the "loonie."

Exchange Rates

The rate at which one currency can be exchanged for another, playing a critical role in international trade and finance.