Automatic Stabilizers Reduce the Size of Economic Fluctuations Since They

question 38

Multiple Choice

Automatic stabilizers reduce the size of economic fluctuations since they

• A)affect aggregate demand and aggregate supply at the same time
• B)reduce the outside lag to practically zero
• C)reduce the recognition lag to practically zero
• D)reduce the fiscal policy multiplier to 1
• E)ensure that disposable income falls by less than income after a disturbance

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Definitions:

Margin Call

A demand by a broker that an investor deposit further cash or securities to cover possible losses.

Variation Margin Check

A financial safeguard measure in futures trading that involves calculating and settling the gains or losses on open contracts to ensure enough capital exists to cover potential losses.

Futures Contracts

Contracts that obligate the purchase or sale of a specific commodity or financial asset at an agreed-upon price at a future date.

Actual Delivery

The physical transfer of a security or commodity from seller to buyer, which finalizes the transaction process.