If aggregate output is falling,_____.

A) federal budget deficit decreases
B) tax revenue increases
C) automatic stabilizers will tend to increase the size of the deficit
D) automatic stabilizers will tend to decrease the size of the deficit
E) transfer payments decrease as fewer people become eligible for public assistance

Automatic Stabilizers

Financial strategies and initiatives, including taxation and unemployment insurance, that inherently adapt to mitigate economic variations without the need for further action by the government.

Aggregate Output

The total value of all goods and services produced in an economy within a given period of time.

Tax Revenue

The government's income from taxes imposed on individuals, businesses, and other legal entities.