An example of automatic stabilizers is
A. government spending falling during an expansion.
B. government spending falling during a recession.
C. deficit targeting.
D. taxes falling in an expansion.
Answer: A
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Monetarists
A. argue for the use of discretionary monetary policy. B. contend that government policies have reduced the stability of the economy. C. believe a capitalistic economy is inherently unstable. D. believe the markets in a capitalistic economy are largely noncompetitive.
If tax revenues equal 25 percent of total output and government expenditures equal 20 percent of total output, then there is a:
A. trade surplus. B. government budget surplus. C. trade deficit. D. government budget deficit.
Refer to the accompanying figure. For the nation whose PPC is shown, it must be true that:
A. some of the nation's productive resources are better-suited to making milk, and some are better-suited to making movies. B. the nation has a comparative advantage in making milk. C. the nation's productive resources are better-suited to making milk than to making movies. D. the nation's productive resources are better-suited to making movies than to making milk.
If the current macroequilibrium is below an output level of that associated with full employment, how would the current equilibrium be impacted by a rightward shift of the aggregate supply curve, ceteris paribus?
A. A higher price level and a lower level of output. B. A lower price level and a higher level of output. C. A recession or depression. D. A higher price level and a higher level of output.