Even though prices may change frequently, they can be expected to gravitate toward equilibrium.

A rise in the price of an input can be expected to lead to a rise in its marginal physical product

a. True b. False Indicate whether the statement is true or false

An example of an automatic stabilizer is:

A. increased unemployment rates cause the government to pay out more in unemployment insurance. B. increased tax revenues due to nominalincome going up during a boom. C. reduced unemployment rates during a boom means more people working, and the government pays less out in food assistance. D. All of these are examples of automatic stabilizers.