The existence of automatic stabilizers will
A. cause the effects of shocks to aggregate demand to have a larger effect on GDP.
B. reduce the size of recessionary and inflationary gaps.
C. reduce the recognition lag of discretionary fiscal policy.
D. eliminate recessions.
Answer: B
You might also like to view...
If fewer cigarettes are consumed with symmetric information than asymmetric information, it follows that
A. with asymmetric information the demand for cigarettes is lower than with symmetric information. B. with symmetric information the demand for cigarettes is lower than with asymmetric information. C. the demand for cigarettes is the same with or without asymmetric information. D. there are more free riders with asymmetric information than symmetric information. E. There is not enough information to answer the question.
Economic growth is represented by a: a. rightward shift of the rule of 72 curve
b. movement along a production possibilities curve. c. rightward shift in potential real GDP (LRAS). d. leftward shift of the long-run aggregate supply curve (LRAS).
There is concern among economists who favor free trade that some regional agreements may promise free trade, but actually act as a way for the countries within the regional agreement to try to ________ trade from anywhere else.
a. support b. encourage c. eliminate d. limit
Related to the Economics in Practice on p. 666: When a country opens its markets to free trade, competition ________ and efficiency ________.
A. decreases; improves B. grows; declines C. grows; improves D. decreases; declines