When automatic fiscal stabilizers are in place, a shock that causes a fall in the kevel of economic activity automatically | Faculties

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Gopal Sharma

🎓 Tutor III ⭐ 38.32K Points

📊 Managerial Economics

Q. When automatic fiscal stabilizers are in place, a shock that causes a fall in the kevel of economic activity automatically

(A) Results in a decline in the federal budget deficit that lessens the fall in income
(B) Results in a rise in the federal deficit that lessens the fall in income
(C) Requires the federal government to balance the budget
(D) Will lead to a permanent increase in the budget deficit

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✅ Correct Answer: (B) Results in a rise in the federal deficit that lessens the fall in income

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