The Effectiveness of the Built-In or Automatic Stabilizers Is Limited

question 2

Multiple Choice

The effectiveness of the built-in or automatic stabilizers is limited because:

• A)the stabilizers produce budget surpluses during recessions.
• B)transfer payments and subsidies increase during inflation and decrease during recessions.
• C)the offset which the stabilizers provide to a change in private spending is less than the change in private spending.
• D)the stabilizers raise the general price level regardless of the phase of the business cycle.

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Definitions:

Developmental Task

Specific accomplishments that are achieved at certain periods in life, contributing to successful progression through stages of development.

Superego

The conscience of personality; the source of feelings of guilt, shame, and inhibition.

Neonates

Newborn infants, especially those less than four weeks old.

Cephalocaudal Growth

A pattern of growth in humans and animals, where development and growth proceed from the head downward through the body.