One benefit of automatic stabilizers is that they
a. decrease consumption during a recession below what it would otherwise be
b. make GDP more volatile
c. cause the cyclical deficit to fall during a recession
d. increase consumption during a recession above what it would otherwise be
e. increase consumption during an expansion above what it would otherwise be
D
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According to the law of demand, consumers will
A) change their production plans when the price of a good changes. B) change their consumption plans when the price of a good changes. C) change their demand when the price of a good changes. D) increase their quantity demanded when the price of a good increases. E) decrease their quantity demanded when the price of a good decreases.
An export subsidy is
A) a payment to a firm or individual that ships a good abroad. B) a fee that is charged to a country that ships goods to the U.S. C) a payment made to a foreign government in return for preferential trade treatment. D) illegal in the U.S. but is fairly common in the rest of the world. E) a limit on the quantity of a good or service that can be sold abroad.
Investment spending is
A) directly related to the interest rate. B) inversely related to the interest rate. C) directly related to real disposable income. D) inversely related to real disposable income.
Jessica’s workplace is collecting money for a lottery pool. Each employee can choose to contribute $50, with a 1 in 600,000 chance of winning $1 million. If Jessica chooses not to contribute to the lottery pool, she is probably experiencing:
A. positive framing. B. the endowment effect. C. loss aversion. D. status quo bias.