An example of an automatic stabilizer is
A. changing the tax laws to increase the marginal tax rates.
B. the interest the government pays on loans.
C. the indexation of social security benefits to the consumer price index.
D. the food stamp program.
Answer: D
Economics
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What will be an ideal response?
Economics
This year Gus purchased a used 1972 vehicle from Wee-Rob-U Auto Sales. The dealer paid $500 for it yesterday, and sold it to Gus for $3500. In principle, what happens to GDP?
A) Nothing, because the vehicle was already accounted for in 1972. B) Nothing, because Gus was ripped off. C) It increases by $3000. D) It increases by $3,500. E) It increases by $6,500.
Economics