Automatic stabilizers stabilize the level of real GDP because:
A. Congress quickly changes spending and tax revenue.
B. federal expenditures and tax revenues change as the level of real GDP changes.
C. the spending and tax multiplier are constant.
D. wages are controlled by the minimum wage law.
Answer: B
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Indicate whether the statement is true or false
An increase in the price of a complement shifts the demand curve to the
a. right b. left c. it does not change the demand curve d. none of the above
During 1982-1997, stock prices increased substantially. Which of the following helped to boost stock prices during this period?
a. higher interest rates and rapid growth of corporate profits b. lower interest rates and rapid growth of corporate profits c. higher interest rates and slow growth of corporate profits d. lower interest rates and slow growth of corporate profits
Consolidation in an industry can be a good thing if larger firms are more efficient at producing products at a lower price.
a. true b. false