Which of the following best describes the built-in stabilizers as they function in the United States?
A. The size of the multiplier varies inversely with the level of GDP.
B. Personal and corporate income tax collections automatically fall and transfers and
subsidies automatically rise as GDP rises.
C. Personal and corporate income tax collections and transfers and subsidies all
automatically vary inversely with the level of GDP.
D. Personal and corporate income tax collections automatically rise and transfers and
subsidies automatically decline as GDP rises.
D. Personal and corporate income tax collections automatically rise and transfers and
subsidies automatically decline as GDP rises.
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Which of the following is NOT a true statement about capital controls?
A) Countries are more able to prevent capital inflows than they were in the 1970s. B) Capital controls may reduce world welfare by preventing capital from moving to its most valuable use. C) It is unclear whether it is best to limit capital inflows, capital outflows, or both. D) Restricting the movement of capital cannot stop a crisis once it has begun.
During the Great Depression of the 1930s,
a. real GDP could not increase without exerting pressure on the price level b. aggregate demand was insufficient to achieve full-employment GDP c. aggregate demand shifted to the right while aggregate supply shifted to the left, causing GDP and the price level to decrease d. the economy's resources were fully employed, although real GDP fell e. the aggregate demand curve cut the aggregate supply curve along the supply curve's vertical segment