Answer to Question #249782 in Macroeconomics for Prisca Mahlalela

Question

Considering automatic stabilizer, which of the following is likely to increase the South African 

government’s existing budget deficit? 

I. A decrease in real GDP.

II. Lower unemployment rate. 

III. A decrease in the price level.

A. I only

B. II only 

C. II and III only

D. I, II and III

Answer 1

C. II and III only