Automatic Stabilizers Create ________ During Recessions from Increased Government Spending

Multiple Choice

Automatic stabilizers create ________ during recessions from increased government spending on welfare and unemployment insurance, and reduced tax revenues, and create _________ during peak growth periods of the economy from reduced government welfare spending and increased tax revenues.

A) fiscal stimulus, fiscal contraction
B) fiscal stimulus, fiscal stimulus
C) fiscal contraction, fiscal stimulus
D) fiscal contraction, fiscal contraction