As the economy contracts, tax revenues
A. rise and transfer payments rise, causing the economy to contract by more than it would in the absence of automatic stabilizers.
B. rise and transfer payments fall, causing the economy to contract by less than it would in the absence of automatic stabilizers.
C. fall and transfer payments fall, causing the economy to contract by more than it would in the absence of automatic stabilizers.
D. fall and transfer payments rise, causing the economy to contract by less than it would in the absence of automatic stabilizers.
Answer: D
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