Every economic choice has an opportunity cost

Programs that automatically increase government spending (relative to revenue) during a recession and automatically decrease government spending (relative to revenue) during an economic boom are called:

A. discretionary fiscal policy. B. supply-side programs. C. automatic stabilizers. D. tax credits.

Graphically an increase in the short-run aggregate supply line represents a(n) ________, and a shift leftward of the long-run aggregate supply line represents a(n) ________.

A. shock to potential output; adverse inflation shock B. shock to potential output; favorable inflation shock C. favorable inflation shock; shock to potential output D. adverse inflation shock; shock to potential output