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Basic Question 5 of 11
During an economic contraction, automatic stabilizers reduce ______.
B. a budget surplus but increase a deficit
C. a budget deficit but increase a surplus
A. both budget surpluses and deficits
B. a budget surplus but increase a deficit
C. a budget deficit but increase a surplus
User Contributed Comments 3
| User | Comment |
|---|---|
| danlan | Automatic stabilizers do not require any fiscal change or gouvernment expenditure change, the effect is automatic with the economic expansion/recession. |
| Chidinmaiw | thank you danlan, you cleared that up for me |
| polaska | it is equivalent to say that during an economic expansion, they increase a budget surplus and decrease a deficit, isn't it? |
I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
explain the implementation of fiscal policy and difficulties of implementation as well as whether a fiscal policy is expansionary or contractionary
CFA® 2024 Level I Curriculum, Volume 1, Module 3.