Because of automatic stabilizers, when GDP fluctuates the...
What will be an ideal response?
government's deficit fluctuates inversely with GDP so that it is larger when GDP decreases
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A major factor in determining the rational expectation of inflation is
A) the size of the budget deficit. B) forecasts of the Fed's monetary policy. C) forecasts of fiscal policy. D) the previous month's unemployment rate. E) the recent past behavior of the stock market.
The economy tends to be more stable with a __________ LM curve causing interest rates to be rather __________ to shifts in the IS curve
A) steeper; sensitive B) steeper; insensitive C) flatter; sensitive D) flatter; insensitive
Exhibit 10-4 Supply and demand curves for food servers
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In Exhibit 11-4, suppose that in the interest of boosting incomes of the working poor, Congress imposes a minimum wage of $6.00 per hour. This minimum wage rate creates a(n):
A. new labor market equilibrium. B. excess demand for labor of 10 thousand food servers. C. excess supply of labor of food servers. D. situation of full employment for food servers.
If John drives more recklessly because he has good automobile insurance, it is an example of moral hazard.
Answer the following statement true (T) or false (F)