Automatic Stabilizers Stabilize the Level of Real GDP Because

question 92

Multiple Choice

Automatic stabilizers stabilize the level of real GDP because:

• A) Congress quickly changes spending and tax revenue.
• B) federal expenditures and tax revenues change as the level of real GDP changes.
• C) the spending and tax multiplier are constant.
• D) wages are controlled by the minimum wage law.

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Definitions:

Normal Labour Cost

The typical expenses associated with compensating employees, including wages, salaries, and benefits, under standard operational conditions.

Gain-Sharing Plan

A compensation strategy where employees receive financial bonuses based on improvements in the company’s performance, encouraging teamwork and efficiency.

Nonmonetary Reward Plans

Incentive systems that provide rewards or recognition in forms other than direct payment, such as professional development, privileges, or awards.

Elected Committee

A group of individuals chosen through a voting process to represent or make decisions on behalf of a larger group.