The Effectiveness of the Built-In or Automatic Stabilizers Is Limited

Multiple Choice

The effectiveness of the built-in or automatic stabilizers is limited because:

A) the stabilizers produce budget surpluses during recessions.
B) transfer payments and subsidies increase during inflation and decrease during recessions.
C) the offset which the stabilizers provide to a change in private spending is less than the change in private spending.
D) the stabilizers raise the general price level regardless of the phase of the business cycle.