Generally Speaking, Automatic Fiscal Stabilizers

Multiple Choice

Generally speaking, automatic fiscal stabilizers

A) raise the level of consumption during recessions, which offsets any decrease in investment
B) dampen the decrease in disposable income during recessions, so disposable income as a fraction of total income actually rises
C) increase the size of the fiscal policy multiplier
D) cannot be relied on if a disturbance is transitory
E) work mainly through reduction in the outside lag