Automatic stabilizers smooth fluctuations in the economy because they produce changes in the government's budget that:
A. Reinforce changes in GDP
B. Help offset changes in GDP
C. Produce a cyclically-adjusted budget
D. Produce a standardized budget
B. Help offset changes in GDP
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The 2007-2009 recession began with reductions in investment and consumption spending, precipitated by a financial crisis. This explanation for the recession is consistent with
A. the monetarist view of macroeconomic instability. B. the mainstream view of macroeconomic instability. C. the rational expectations view of macroeconomic instability. D. the real business cycle theory of macroeconomic instability.
In consumer equilibrium, the marginal utility of good A, B and C are 100, 300, and 400 respectively. If the price of good A was $35, then the prices of goods B and C, respectively, are:
a. $105 and $140. b. $140 and $105. c. $105 and $175. d. $140 and $175.
Marcus is of the opinion that the theory of liquidity preference explains the determination of the interest rate very well. Most economists would say that Marcus's opinion is
a. Keynesian in nature, and that his view is more valid for the long run than for the short run. b. classical in nature, and that his view is more valid for the long run than for the short run. c. Keynesian in nature, and that his view is more valid for the short run than for the long run. d. classical in nature, and that his view is more valid for the short run than for the long run.
A corrective tax on steel would ______.
a. raise the deadweight loss b. raise the demand c. raise the price d. raise the supply