Built-In Stability Means That

question 101

Multiple Choice

Built-in stability means that:

• A)an annually balanced budget will automatically offset the pro-cyclical tendencies created by state and local finance and thereby stabilizes the economy.
• B)with given tax rates and expenditures policies a rise in domestic income will reduce a budget deficit or produce a budget surplus while a decline will result in a deficit or a lower budget surplus.
• C)Parliament will automatically change the tax structure and expenditure programs to correct upswings and downswings in business activity.
• D)government expenditures and tax receipts automatically balance over the business cycle, though they may be out of balance in any single year.

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