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:

Cognitive Processes

Mental actions or operations that involve thinking, understanding, learning, and remembering.

CEOs

Chief Executive Officers who are the highest-ranking individuals in a company, responsible for major corporate decisions.

Competitive Strategy

An approach a business takes to differentiate itself from its competitors to gain a competitive advantage.

Behavioral Integration

The degree to which diverse groups or individuals within an organization share and combine their behaviors and information for collective benefit.