When Output Deviates from Potential GDP, Automatic Stabilizers Work to Push

question 4

Multiple Choice

When output deviates from potential GDP, automatic stabilizers work to push the economy:

• A) in the same direction that correctly timed and formulated discretionary policy would.
• B) to lower rates of inflation.
• C) away from risky financial investments.
• D) None of these.

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Definitions:

OxyContin

A prescription opioid pain medication known for its potential for abuse and its role in the opioid addiction crisis.

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A psychoactive drug from the Cannabis plant intended for medical or recreational use.