Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter30: Government Budgets And Fiscal Policy
Section: Chapter Questions
Problem 51P: A government starts off with a total debt of $3.5 billion. In year one, the government runs a...
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Question
19.
If an economy moves into a recession, causing that country to produce less than potential GDP, then:
- automatic stabilizers will cause tax revenue to decrease and government spending to increase.
2. automatic stabilizers will cause tax revenue to increase and government spending to decrease.
3. tax revenue and government spending will be higher because of automatic stabilizers.
4.tax revenue and government spending will be lower because of automatic stabilizers.
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