When the economy is experiencing an expansionan expansion automatic stabilizers will cause:

a. transfer payments to decrease and tax revenues to decrease.

b. transfer payments to increase and tax revenues to increase.

c. transfer payments and tax revenues to be unaffected.

d. transfer payments to decreasedecrease and tax revenues to increaseincrease?

Question

Business

Franco Patrick

20 July, 03:43

When the economy is experiencing an expansionan expansion automatic stabilizers will cause:

a. transfer payments to decrease and tax revenues to decrease.

b. transfer payments to increase and tax revenues to increase.

c. transfer payments and tax revenues to be unaffected.

d. transfer payments to decreasedecrease and tax revenues to increaseincrease?

+1

Answers (1)

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Kaylyn Crosby · Answer 1

When the economy is experiencing an expansion automatic stabilizers will cause transfer payments to decrease and tax revenues to decrease. A transfer payment is a payment that is made but no goods or services are being paid for. Automatic stabilizers are policies and programs set up in the economy to offset the up and down of an economy to keep the government out of the situation on a daily basis.