Built-In Stability Means That

Multiple Choice

Built-in stability means that:

A) an annually balanced budget will automatically offset the pro-cyclical tendencies created by state and local finance and thereby stabilizes the economy.
B) with given tax rates and expenditures policies a rise in domestic income will reduce a budget deficit or produce a budget surplus while a decline will result in a deficit or a lower budget surplus.
C) Parliament will automatically change the tax structure and expenditure programs to correct upswings and downswings in business activity.
D) government expenditures and tax receipts automatically balance over the business cycle, though they may be out of balance in any single year.