Automatic stabilizers will shift the government budget toward
a. a surplus during both expansions and contractions.
b. a deficit during both expansions and contractions.
c. a surplus during an expansion and a deficit during a contraction.
d. a surplus during a contraction and a deficit during an expansion.
C
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A cold winter will increase the quantity of heating fuel demanded at every price.
Answer the following statement true (T) or false (F)
A flat LM curve implies that
A) an increase in government spending will change output by a relatively small amount. B) a decrease in taxes will change output by a relatively small amount. C) changes in government spending and taxes will have a large multiple effect on output. D) A and B.
If a firm can sell 3,000 units of product A at $10 per unit and 5,000 at $8, then
A) the price elasticity of demand is 0.44. B) A is a complementary good. C) the price elasticity of demand is D) A is an inferior good.
A monopoly exists when
A. The government intervenes on behalf of consumers. B. A small number of firms are the only producers of a good. C. A large number of firms are producing a good. D. One firm produces all the output for a particular good or service.