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The very large budget deficit in 2009 is attributed to a combination of discretionary policy and:
AAutomatic stabilizers
BRising excise taxes
CFalling interest rates
DNew trade tariffs
Answer & Solution
Correct answer: A. Automatic stabilizers
1. Deficits can grow without any new law being passed.
2. Discretionary fiscal policy requires a new law changing tax or spending levels.
3. Other budget changes happen automatically as the economy moves.
4. A combination of automatic stabilizers and discretionary fiscal policy produced the deficit.
5. That combination produced the very large budget deficit in 2009.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 16 'Government Budgets and Fiscal Policy'_
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