Generally Speaking, Automatic Fiscal Stabilizers

question 9

Multiple Choice

Generally speaking, automatic fiscal stabilizers

• A)raise the level of consumption during recessions, which offsets any decrease in investment
• B)dampen the decrease in disposable income during recessions, so disposable income as a fraction of total income actually rises
• C)increase the size of the fiscal policy multiplier
• D)cannot be relied on if a disturbance is transitory
• E)work mainly through reduction in the outside lag

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Definitions:

Workers' Compensation Insurance

Insurance that provides wage replacement and medical benefits to employees injured in the course of employment.

Work-Related Accidents

Accidents that occur in the course of employment, potentially resulting in injury or occupational disease.

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A type of pension plan in which an employer promises a specified pension payment in retirement that is predetermined by a formula based on the employee's earnings history, tenure of service, and age.

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Defined-contribution Plan is a retirement savings plan where the amount contributed by the employer or employee is specified, but the future benefit amount is not guaranteed.