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.
b
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The efforts of individuals to protect themselves against losses as a result of inflation
A) are irrational because one person's loss as a result of inflation is someone else's gain. B) can only succeed if everyone correctly anticipates the rate and timing of inflation. C) cannot succeed because no private citizen has the ability to stop inflation. D) use up valuable resources that could have been employed in other ways.
The most popular floating rate in swaps is
A) LIBOR. B) the Treasury note rate. C) the prime rate. D) the six-month Treasury bill rate.