Automatic stabilizers have the effect of
a. Increasing aggregate demand when the nation is below full employment.
b. Restraining the decline in demand but not stimulating any increase in aggregate demand that would move the nation back toward equilibrium.
c. Causing government spending to rise and taxes to rise as a nation moves into a recession.
d. Destabilizing a nation, once you consider the active deficits or surpluses they cause.
.B
You might also like to view...
Jon runs a bar in New York City. A city law prevents smoking in New York bars, but Jon is able to convince a friend in city hall to grant his bar a smoking permit by exploiting some fancy loopholes in the law
While smoking enables Jon to charge a premium to the customers (higher drink prices), his workers are subject to second-hand smoke. Therefore Jon has to pay his workers a wage higher than he otherwise would. Assuming Jon's production function is f(L,K) = L?K1-?, where L is the quantity of workers and K is the quantity of capital, how does Jon's optimal capital-to-labor ratio compare to similar bars without smoking?
Monopolies and oligopolies both erect barriers to entry through the use of
A) price cutting. B) patents. C) franchising. D) advertising.
A monopoly always operates in the inelastic portion of its demand curve
Indicate whether the statement is true or false
Social Security benefits paid by the federal government
A. Are income transfers financed by taxes on workers and employers. B. Have no effect on the decision of for whom output is to be produced. C. Are not a transfer program because people must contribute to the fund in order to receive benefits. D. Are classified as in-kind benefits.