An automatic stabilizer is a feature of the economy that
A. makes prices “sticky.”
B. reduces its sensitivity to shocks.
C. maximizes its volatility.
D. automatically reduces recessionary trends.
Answer: B
Economics
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The money supply in Muckland is $100 billion. Nominal GDP is $800 billion and real GDP is $200 billion. What are the price level and velocity in Muckland?
a. The price level and velocity are both 8. b. The price level is 2 and velocity is 8. c. The price level and velocity are both 4. d. The price level is 4 and velocity is 8.
Economics
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Economics