A major benefit of automatic stabilizers is that they:
a. guarantee a balanced budget over the course of the business cycle.
b. have a tendency to reduce the national debt.
c. help increase recessionary gaps in the economy.
d. moderate the effect of fluctuations in the business cycle.
e. require legislative review by Congress before they can be implemented.
d
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Unemployment and recessions are sometimes necessary to curb high inflation
Indicate whether the statement is true or false
In the above figure, the short-run aggregate supply curve is SAS and the aggregate demand curve is AD. An inflationary gap exists
A) if the long-run aggregate supply curve is LAS1. B) if the long-run aggregate supply curve is LAS2. C) if the long-run aggregate supply curve is LAS3. D) All of the above answers are correct.
If, at some level of output, total planned real expenditures are greater than real Gross Domestic Product (GDP)
A. real GDP will either fall or remain unchanged, depending on the MPC. B. real GDP will fall. C. real GDP remains unchanged. D. unplanned inventories will decrease.
In Progress and Poverty (1879), Henry George argued for:
A. A progressive income tax B. A heavy tax on land-rent income C. A flat tax D. A subsidy for land