Government spending rising during a recession is an example of
A. policy lags.
B. an automatic stabilizer.
C. an automatic destabilizer.
D. discretionary economic policy.
Answer: B
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A federal budget deficit
a. occurs when government expenditures exceed tax revenues. b. occurs when monetary policy works in the opposite direction of fiscal policy. c. occurs when tax revenues exceed government expenditures. d. occurs when transfer payments exceed tax revenues. e. will always result when Congress and the president cannot agree on expenditures.
Define the short-run Phillips curve
What will be an ideal response?
When exports of American goods increase, this __________ the demand for U.S. dollars and at the same time __________ foreign currencies
A) increases; increases the supply of B) decreases; increases the supply of C) increases; decreases the supply of D) increases; increases the demand for E) none of the above
Correcting a market with an externality through taxation creates ________ total surplus compared to correcting it through a quota.
A. the same B. more C. less D. Any of these statements could be true depending on whether the tax is imposed on the buyer or seller.