Which of the following would not be considered an automatic stabilizer?
A) rising corporate income tax revenues due to an expanding economy
B) increasing food stamp payments due to more people becoming unemployed during a recession
C) legislation increasing funding for job retraining passed during a recession
D) decreasing unemployment insurance payments due to increased employment during an expansion
C
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In the extended classical model, an unexpected decrease in aggregate demand would cause unanticipated inflation to be ________ and cyclical unemployment to be ________
A) positive; negative B) positive; positive C) negative; negative D) negative; positive
If the expected inflation rate was 2.5%, the expected real interest rate was 4.0%, and the actual inflation rate turned out to be 3.2%, then the real interest rate equals
A) 1.7%. B) 3.2%. C) 3.3%. D) 4.7%.