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Because of Automatic Stabilizers, When GDP Fluctuates the

Question 137

Multiple Choice

Because of automatic stabilizers, when GDP fluctuates the


A) government's deficit fluctuates directly with GDP so that it is larger when GDP increases.
B) government's deficit fluctuates inversely with GDP so that it is larger when GDP decreases.
C) the economy will automatically go to full employment.
D) government's budget remains in balance.

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