All of the following contribute to greater deficits when unemployment rises and reduce the deficit during an inflationary gap except for
A)U.S.exports.
B)Welfare benefits.
C)Progressive personal income taxes.
D)Unemployment insurance benefits.

Question

Quizplus · Accepted Answer

U.S. exports are not directly related to the automatic stabilizers that affect the budget deficit during economic fluctuations. Welfare benefits, progressive personal income taxes, and unemployment insurance benefits all act as automatic stabilizers, increasing the deficit when unemployment rises and reducing it during an inflationary gap by adjusting government spending and tax revenues in response to economic conditions. U.S. exports, however, are influenced by global demand and other factors, not directly by domestic unemployment levels or inflationary pressures.

All of the Following Contribute to Greater Deficits When Unemployment