Automatic fiscal policy is at work if, as real GDP increases, ________.
A. transfer payments decrease and interest rates decrease
B. transfer payments increase and tax revenues decrease
C. tax revenues increase and transfer payments decrease
D. tax revenues decrease and interest rates increase
Answer:C
Automatic fiscal policy is at work if, as real GDP increases, ________.
A. transfer payments decrease and interest rates decrease B. transfer payments increase and tax revenues decrease C. tax revenues increase and transfer payments decrease D. tax revenues decrease and interest rates increase