An example of an automatic stabilizer is
a. unemployment benefits.
b. a lowering of interest rates by the Fed.
c. a decrease in money demand.
d. a decrease in tax rates in response to a recession.
a
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Indexation is designed to
A) moderate the costs of inflation, not inflation itself. B) rapidly reduce inflation. C) reduce the natural rate of unemployment. D) rapidly reduce inflationary expectations.
If price support policy increases producer surplus more than reducing consumer surplus, then
A) the policy leads to a Pareto-superior allocation. B) the policy leads to an increase in social welfare. C) the policy improves the efficiency of society. D) None of above.
The federal government has the power to investigate and to try to block
a. only voluntary mergers between firms. b. only hostile takeovers. c. only friendly takeovers. d. any combining of the ownership of previously independent firms that increases concentration.
Assuming the total population is 200 million, the labor force is 100 million, and 92 million workers are employed, the unemployment rate is:
a. 6 percent b. 8 percent c. 4 percent d. 10 percent