Automatic stabilizers are provisions in the law that imply automatic ______ in government spending or ______ in taxes when real output declines.
A) increases; increases
B) increases; decreases
C) no change; no change
D) decreases; decreases

Question

Quizplus · Accepted Answer

Automatic stabilizers imply automatic increases in government spending or decreases in taxes when real output declines. Therefore, the best choice is B, which states increases in government spending and decreases in taxes as the automatic stabilizers during a decline in real output.

Automatic Stabilizers Are Provisions in the Law That Imply Automatic