One Characteristic of Automatic Fiscal Policy Is That It

question 189

Multiple Choice

One characteristic of automatic fiscal policy is that it

• A) reduces the size of the federal government debt during times of recession.
• B) has no effect on unemployment.
• C) automatically produces surpluses during recessions and deficits during inflation.
• D) requires no legislative action by Congress to be made effective.

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Definitions:

Compounded Semi-annually

An interest calculation method in which interest is added to the principal balance twice a year, leading to exponential growth.

Monthly Payments

Regular payments made once a month, often used in the context of loans or leases.

Compounded Monthly

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.

Amortization Schedule

A table detailing each periodic payment on a loan over time, breaking down the amounts going towards principal and interest.