In Terms of Fiscal Policy, Which of the Following Is

question 97

Multiple Choice

In terms of fiscal policy, which of the following is an example of a fiscal automatic stabilizer?

• A)The reduction in the money supply that occurs as banks become less willing to make loans during a recession
• B)The reduction in wages that occurs as the economy goes into a recession
• C)The increase in government spending that occurs as the result of new spending bills passed by Congress
• D)The rise in tax revenue that occurs as a result of growth in real GDP

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Definitions:

Xanax

A prescription medication primarily used to treat anxiety and panic disorders.

Lithium

A chemical element used as a medication, particularly in the treatment of bipolar disorder, by stabilizing mood and reducing extremes in behavior.

Cognitive-behavioral Therapy

A type of therapy focusing on improving well-being and solving issues through altering negative emotions, actions, and thought patterns.

Phobias

Intense, irrational fears of specific objects or situations, leading to significant distress and avoidance behavior.