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- Subject
- Fiscal And Monetary Policyeconomics-mcqs › fiscal-and-monetary-policy
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
During economic downturns, automatic stabilizers function to ____ government spending and ____ tax income?
Multiple choice question for Fiscal And Monetary Policy. Select an option, then review the explanation below.
Explanation
Automatic stabilizers work by increasing government expenditures and lowering tax revenues during recessions to help stabilize the economy.
More Fiscal And Monetary Policy MCQs
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?