The distinction between discretionary fiscal policy and the use of automatic stabilizers is that
a. only discretionary fiscal policy can stimulate the economy.
b. only automatic stabilizers can stimulate the economy.
c. discretionary fiscal policy, once adopted, is built into the structure of the economy.
d. automatic stabilizers, once adopted, are built into the structure of the economy.
D
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Okun's law states that for every 1-percentage-point increase in the cyclical unemployment rate, real GDP growth
A) must increase by 1 percentage point for the economy to keep from experiencing a recession. B) decreases by about 2 percentage points. C) declines for 1 year. D) increases by 1 percentage point.
In July 2008, the Federal Communications Commission approved the merger of satellite radio providers XM Satellite and Sirius Satellite Radio, establishing a single satellite radio company in America
Under the terms of the deal, the companies agreed not to raise prices for the next three years. Why would the FTC require prices not to increase for three years? A) Compared to competition, monopolies are always worse for consumers. B) Compared to competition, monopolies restrict output and charge higher prices. C) Compared to competition, monopolies increase prices and output. D) Compared to competition, monopolies restrict output and charge lower prices.
A decrease in the level of real GDP in the economy leads to:
A. a leftward shift in the demand for money curve. B. a rightward shift in the demand for money curve. C. a leftward movement along the demand for money curve. D. a rightward movement along the demand for money curve.
What is the level of private investment in equilibrium? Write an equation for the investment demand curve?
Consider the closed economy of country A where KI = 0. In year 2009, government expenditure (G) is $300 billion, the total tax collected (T) is $900 billion and tax being transferred (TR) is $200 billion. The loanable fund market is currently in equilibrium, and the total demand equation (including SG) is DLF: r =0.04 - 0.000025Q, where r is the real interest rate, and that private saving, SP, equals $800 billion at equilibrium