Automatic Fiscal Stabilizers Are Most Helpful in

question 86

Multiple Choice

Automatic fiscal stabilizers are most helpful in

• A)making discretionary fiscal policy effective.
• B)reducing the intensity of business cycles.
• C)removing persistent output gaps.
• D)promoting economic growth.
• E)eliminating price fluctuations in the economy.

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Definitions:

Nominal Interest Rate

The nominal interest rate refers to the percentage increase in money that the borrower pays the lender, excluding any adjustments for inflation.

Real Interest Rate

The inflation-adjusted interest rate, representing the actual borrowing cost and the genuine earnings for savers.

Real Value

The worth of a good or service adjusted for inflation, showing its true purchasing power.

Output

The amount of goods or services produced by a company, country, or economic system within a certain period.