During a boom expansionary economy, public assistance payments and unemployment compensation payments automatically decrease while income taxes automatically increase. Which of the following best describes the effect of these changes on aggregate demand?
a. Aggregate demand will be less than it would be without these automatic stabilizers.
b. Aggregate demand will be the same as it was before
the expansion.
c. Aggregate demand will be less than it was before the expansion.
d. none of the above
a
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There will be gains from trade when
A. the buyer values a product more highly than the seller. B. money is used as a medium of exchange. C. both the buyer and the seller attach the same value to the product. D. the buyer values a product less highly than the seller.
In general, lower marginal tax rates provide incentives to
A. Produce more output. B. Work less. C. Find more tax loopholes. D. Invest less.
When one person enjoys the benefit of a tornado siren, she reduces the benefit to others
a. True b. False Indicate whether the statement is true or false
If the change in business inventories is positive, then final sales are
A. greater than GDP. B. zero. C. less than GDP. D. equal to GDP.