Government transfer payments act as automatic stabilizers because as labor income decreases, transfer payments
A. decrease as well.
B. remain constant.
C. increase.
D. to the government increase.
Answer: C
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A decrease in both equilibrium price and quantity could be produced by a(n)
a. decrease in supply, with demand constant b. increase in supply, with demand constant c. decrease in demand, with supply constant d. increase in demand, with supply constant e. improvement in technology
When the Fed announces that it is raising the federal funds rate, this signals its intention to _______ bonds in the open market and _______ the money supply.
A. Buy; reduce B. Buy; increase C. Sell; reduce D. Sell; increase
Sharon deposits $150.00 in her savings account at the bank. At the end of one year she has $156.38. What was the interest rate that Sharon earned?
A. 4.52% B. 5.63% C. 4.25% D. 6.38%
Think about each of the items in the list and explain how they affect incen-tives and might change the choices that people make:
What will be an ideal response?