Because Automatic Stabilizers Lower Transfer Payments and Raise Tax Receipts

Multiple Choice

Because automatic stabilizers lower transfer payments and raise tax receipts as an economy recovers from a recession, they:

A) slow down the pace of an economic recovery.
B) increase the pace of an economic recovery.
C) do not affect the pace of an economic recovery.
D) accelerate the recovery from a recession until inflation starts to develop, at which point they slow the recovery.