What Is an Automatic Stabilizer

question 171

Multiple Choice

What is an automatic stabilizer?

• A) It refers to a discretionary policy that is triggered when actual output is not equal to potential output to improve the economy's performance.
• B) It refers to a stabilization program that keeps inflation in check automatically.
• C) It refers to any government program that tends to reduce fluctuations in GDP automatically.
• D) It refers to a government program that is automatically triggered when the economy enters a recession.

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Definitions:

Democratic Forms

Pertains to the various methods and systems through which democracy is implemented and practiced, encompassing aspects like voting systems, public participation, and representative governance.

Trade Barriers

Measures implemented by governments to restrict or regulate international trade, including tariffs, quotas, and embargoes.

Wages

Payments made to employees for their labor or services, typically calculated on an hourly, daily, or piecework basis and paid on a regular schedule.

Environmental Regulations

Laws and policies designed to protect the environment from damage and pollution, often involving restrictions on emissions, waste management, and conservation efforts.