During an economic expansion, automatic stabilizers function to government spending and government income.

Multiple choice question for Fiscal And Monetary Policy. Select an option, then review the explanation below.

Explanation

Automatic stabilizers work by lowering government expenditures and increasing government revenues during periods of economic growth to help moderate the business cycle.

Practice related questions from the same subject.

1.Why might a government impose taxes on certain goods or services?
2.Which statement accurately describes a regressive tax system?
3.What is the automatic effect on the government's budget balance when the economy experiences growth?
4.If the marginal tax rate is 40% and an individual's income rises from Rs 10,000 to Rs 12,000, what will be the total tax amount paid?
5.Which of the following actions aligns with a reflationary (expansionary) fiscal policy?

During an economic expansion, automatic stabilizers function to ______ government spending and ______ government income.

Explanation

More Fiscal And Monetary Policy MCQs

During an economic expansion, automatic stabilizers function to government spending and government income.