Given a government budget, a recession increases the federal deficit due to autmatic stabilizers All of the above. the economy contracts and tax revenues automatically fall. welfare progeams such as unemployment insurance and food stamps, automatically increase.

Given a government budget, a recession increases the federal deficit due to autmatic stabilizers All of the above. the economy contracts and tax revenues automatically fall. welfare progeams such as unemployment insurance and food stamps, automatically increase.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.

Question

Given a government budget, a recession increases the federal deficit due to
autmatic stabilizers
All of the above.
the economy contracts and tax revenues automatically fall.
welfare progeams such as unemployment insurance and food stamps, automatically increase.

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