Most people rely primarily on income other than their labor earnings to maintain their standard of living

The marginal propensity to consume is 0.50, marginal propensity to invest is 0.20, and the marginal propensity to import is 0.05. What is the size of the multiplier?

A) 1.00 B) 2.86 C) 3.00 D) 0.50

The automatic mechanism can best be described as:

A) the process of the economy adjusting back to potential GDP without any action taken by the government B) the result of monetary policy implemented by the Fed restoring full employment C) how fiscal policy is used to return the economy to its potential D) using rule-based policies to stabilize the economy