Because of the automatic stabilisers, a decline in the level of economic activity will cause:Group of answer choicesa smaller budget deficit.an increase in welfare payments.an increase in tax revenues collected.a decrease in government expenditures.

Automatic stabilisers are economic policies and programs, such as unemployment and welfare, that are designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers. They are called automatic because they automatically expand during a recession and contract during an expansion, helping to stabilize a nation's economic cycle.

Now, let's go through the answer choices:

a) A smaller budget deficit: This is incorrect. A decline in the level of economic activity usually leads to a larger budget deficit, not a smaller one. This is because government revenues (from taxes) decrease as economic activity slows, while government spending (on things like unemployment benefits and welfare) increases.

b) An increase in welfare payments: This is correct. When economic activity declines, more people lose their jobs or see their incomes decrease, which leads to an increase in the number of people eligible for welfare payments.

c) An increase in tax revenues collected: This is incorrect. A decline in economic activity usually leads to a decrease in tax revenues, not an increase. This is because there are fewer transactions to tax, and people and businesses are earning less income.

d) A decrease in government expenditures: This is incorrect. A decline in economic activity usually leads to an increase in government expenditures, not a decrease. This is because the government needs to spend more on things like unemployment benefits and welfare to support those affected by the economic downturn.

So, the correct answer is: "an increase in welfare payments."