Increased government spending on unemployment insurance during a recession is an example of:
A. expansionary fiscal policy.
B. contractionary fiscal policy.
C. discretionary fiscal policy.
D. an automatic stabilizer.
Answer: D
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If you put $500 into a checking account, the immediate effect (do not consider the money multiplier which we will study in the next chapter) is:
a. M1 rises, M2 falls, and the monetary base remains the same. b. M1 falls, M2 falls, and the monetary base remains the same. c. M1 rises, M2 rises, and the monetary base remains the same. d. M1, M2, and the monetary base fall. e. M1, M2, and the monetary base remain the same.
Competitive Market
What will be an ideal response?
An inferior good is one for which an increase in income causes a(n)
a. increase in supply b. decrease in supply c. increase in demand d. decrease in demand
Which of the following would a behavioral economist be most likely to study?
a. how raising price affects demand for new technology products with no known substitutes b. the effect of consumer equilibrium on a hypothetical transnational marketplace c. how websites that favor one- or five-star customer reviews influence purchasing decisions d. the effects of financial debt on the psychological health of consumers and appropriate treatments