During a recession, rising transfer payments and falling tax…
During a recession, rising transfer payments and falling tax collectionsI. help cushion households from the impact of the recession.II. buffers the fall in real GDP (relative to a situation where transfer payments do not rise and tax revenues do not fall).III. tend to increase a budget deficit or reduce a budget surplus.
Read DetailsDuring an expansion, which of the following occur because of…
During an expansion, which of the following occur because of automatic stabilizers?I. Income tax revenues tend to rise.II. Government transfer payments tend to rise.III. The government’s budget deficit tends to fall or its budget surplus tends to rise.IV. They tend to amplify the rise in real GDP.
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