Automatic stabilizers are provisions in the law which create automatic ________ in government spending or ________ in taxes when real output declines.

What will decrease LRAS?

a. a natural disaster that destroys much of the infrastructure in the country b. an increase in the labor force c. an increase in the nation's energy reserves d. all

Suppose the rate of inflation over the last 5 years has been around 4-5%. Investors use an inflation expectation of that range when making investment decisions. The decision of the investors is based on the theory of _____

a. absolute advantage b. rational expectations c. adaptive expectations d. sticky wages