An Advantage of Automatic Stabilizers Over Discretionary Fiscal Policy Is

question 22

Multiple Choice

An advantage of automatic stabilizers over discretionary fiscal policy is that

• A)automatic stabilizers are not subject to all the same time lags that discretionary fiscal policy is.
• B)automatic stabilizers can be easily fine-tuned to move the economy to full employment.
• C)only Parliament is involved in implementing automatic stabilizers instead of both Parliament and the Bank of Canada.
• D)automatic stabilizers require only a simple majority of Parliament to pass whereas discretionary fiscal policy requires a two-thirds majority to pass.
• E)automatic stabilizers work in recessions and expansions but discretionary fiscal policy works only in a recession.

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