Assume the Economy Is Initially in Equilibrium with Real GDP

Multiple Choice

Assume the economy is initially in equilibrium with real GDP equal to potential GDP.Other things equal,if the economy enters a recession and there are automatic stabilizers,the initial decrease in investment expenditure resulting from the recession is ________ what the decrease would be without automatic stabilizers,and the multiplier is ________ what the multiplier would be without automatic stabilizers.

A) less than; smaller than
B) greater than; larger than
C) equal to; smaller than
D) equal to; greater than