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The Main Reason That the Deficit Grows in a Recession

Question 6

Multiple Choice

The main reason that the deficit grows in a recession is that


A) the government reacts quickly and adjusts taxes to compensate.
B) monetary policy that targets interest rates causes the costs of borrowing to fall.
C) the deficit causes the recession, and reducing the deficit cures the recession.
D) many forms of taxes act as automatic stabilizers.

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