fiscal policy

问题如下：

Question A decrease in tax revenues resulting from an economic recession is best characterized as a(n):

选项：

A.automatic stabilizer.

B.expansionary fiscal policy.

C.contractionary fiscal policy.

解释：

1. Correct because a decline in tax revenues due to a recession is an example of an automatic stabilizer. Automatic stabilizers are features built into the tax and transfer systems of a country that automatically stabilize the economy by reducing the impact of economic fluctuations. During a recession, when economic activity and incomes decline, tax revenues also decrease, leading to an increase in the budget deficit without requiring any deliberate policy changes.
2. Incorrect because a decline in tax revenues due to a recession is not an example of expansionary fiscal policy. Expansionary fiscal policy involves deliberate changes in government spending and taxation with the aim of stimulating economic growth and increasing aggregate demand. In contrast, the decline in tax revenues during a recession is an automatic response to economic conditions and not an intentional policy action.
3. Incorrect because a decline in tax revenues due to a recession is not an example of contractionary fiscal policy. Contractionary fiscal policy involves deliberate changes in government spending and taxation with the goal of reducing aggregate demand and controlling inflation. The decline in tax revenues during a recession is an automatic response to economic conditions and not an intentional policy action.

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