A Big Advantage of Automatic Stabilizers Is That They

question 5

Multiple Choice

A big advantage of automatic stabilizers is that they

• A)completely eliminate the outside lag
• B)do not have any inside lag
• C)make the recognition lag negative
• D)increase the size of the fiscal policy multiplier
• E)make discretionary monetary policy obsolete

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Definitions:

Certificate Of Deposit

A savings certificate issued by a bank to a person depositing money for a specified length of time at a fixed interest rate.

Bond

A financial instrument representing a loan made by an investor to a borrower, typically a corporation or government.

Stock

The goods or merchandise kept on the premises of a shop or warehouse and available for sale or distribution.

Resurgence

A revival or increase in activity, interest, or popularity after a period of quiescence or decline.