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Taxes, the Multiplier Effect, and Automatic Stabilizers
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Taxes, the Multiplier Effect, and Automatic Stabilizers
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20. Fiscal Policy / Taxes, the Multiplier Effect, and Automatic Stabilizers / Problem 8
Problem 8
What effect do automatic stabilizers have on consumption during economic booms?
A
They increase consumption by decreasing taxes.
B
They increase consumption by increasing government spending.
C
They have no effect on consumption.
D
They decrease consumption by increasing taxes.
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