🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Economics
1
answer
0
watching
198
views
22 Oct 2020

To counteract the effect of automatic stabilizers during a recession and to keep the budget balanced, the federal government must _________ government spending, or ________ taxes, and which will ___________ aggregate demand.

Booster class
Macroeconomics
Skill
Automatic stablizers
Watch
1
answer
0
watching
198
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Vaishali Yadav
Vaishali YadavLv10
22 Oct 2020

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Automatic stabilizers lead to changes in taxation and government spending as economic output varies. How do automatic stabilizers impact tax revenue and government spending during a recession?

Tax revenue will:

a. increase

b. not change

c. decrease

and government spending will:

a. increase

b. not change

c. decrease

Suppose that the government is required to balance the budget. Which of the following is an appropriate discretionary approach during a recession and what effect would it have to the economy?

a. Invest in public infrastructure that promotes employment and stimulates the economy.

b. Cut government spending to equal tax revenue possibly magnifying the effects of a recession.

c. Increase government spending to stimulate the economy causing an increase in overall aggregate demand.

d. Cut taxes to encourage consumer spending which would minimize the effects of the recession.

If the federal government is required to maintain a balanced budget, what would be the affect on automatic stabilizers in a recession.

1. Which of the following statements about the debate over stabilization policy are correct? Indicate all that apply.

a. Opponents of active stabilization believe that active fiscal and monetary policies do not affect aggregate demand.

b. Opponents of active stabilization policy believe that significant time lags in both fiscal and monetary policy often exacerbate economic fluctuations.

c. Advocates of active stabilization policy believe that the government can adjust monetary and fiscal policy to counteract waves of excessive optimism and pessimism among consumers and businesses.

d. Advocates of active stabilization believe that automatic stabilizers do not affect aggregate demand.

 

2. Which of the following are examples of automatic stabilizers? 

a. Unemployment insurance benefits

b. The federal funds rate

c. Corporate income taxes

d. all of the choices

 

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in