Which of the Following Serves as an Automatic Stabilizer in the Economy

question 11

Multiple Choice

Which of the following serves as an automatic stabilizer in the economy?

• A)interest rates
• B)exchange rates
• C)the inflation rate
• D)the progressive income tax

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Definitions:

Profit-Maximizing Level

The point of operation where a firm achieves its highest profit, determined by the intersection of marginal cost and marginal revenue.

Marginal Cost

The cost escalation associated with the production of one more unit of a product or service.

Economic Loss

Occurs when total cost exceeds total revenue, not covering all explicit and implicit costs.

Economic Profit

The separation between whole income and all charges, factoring in both straightforward and subtle costs.