As the economy expands, tax revenues rise and transfer payments fall, causing the economy to:?

a) contract less than it would in the absence of these built-in stabilizers.

(b) contract more than it would in the absence of these built-in stabilizers.

(c) expand more than it would in the absence of these built-in stabilizers.

(d) expand less than it would in the absence of these built-in stabilizers.

Answer:
The answer is d because tax revenue artificially stunts growth and transfer payments artificially inflate it by giving people income they haven't earned. If these didn't exist the economy would expand more because the money raised in taxation and redistributed as transfer payments wouldn't be filtered through the government.

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