Automatic stabilizers:
A. require explicit actions by policy makers to become active.
B. work without the need for decisions from Congress or the White House.
C. magnify fluctuations in the economy.
D. increase taxes during recessions.
Answer: B
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A bond is a
a. financial intermediary. b. certificate of indebtedness. c. certificate of partial ownership in an enterprise. d. None of the above is correct.
If the price of Good X is $2, the price of Good Y is $10 and the consumer's budget is $100, which of the following combinations of Good X and Good Y would be on the budget line?
A. 50 units of Good X and 10 units of Good Y B. 10 units of Good X and 6 units of Good Y C. 25 units of Good X and 5 units of Good Y D. 30 units of Good X and 6 units of Good Y
When saving is less than planned investment in the aggregate expenditures model of a private closed economy then:
A. Real GDP will decrease B. The rate of interest will decline C. There will be a decline in the price level D. There will be a rise in real GDP
In order to maximize profits, firms organize their production using
A) only a command system. B) only an incentive system. C) a combination of command and incentive systems. D) neither a command nor an incentive system.