One Advantage of Automatic Stabilizers Over Discretionary Fiscal Policy Is

question 64

Multiple Choice

One advantage of automatic stabilizers over discretionary fiscal policy is that automatic stabilizers:

• A) do not have a long time lag problem.
• B) do not affect the government budget balance.
• C) have a much stronger impact on economic growth rates.
• D) affect both employment and inflation rates rather than just inflation.

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Definitions:

Unrecognized Prior Service Cost

Unrecognized Prior Service Cost represents expenses for pension plan benefits earned in prior periods not yet recognized in financial statements.

Straight-Line Method

A depreciation method that allocates an equal amount of the asset's cost to each year of its useful life.

Actuarial Loss

A financial shortfall that occurs when the actual experience of an insurer or pension plan differs negatively from actuarial assumptions, resulting in higher costs or liabilities.

Manufacturing Plant

A facility used for the production of goods through the combination of human labor, machinery, and processes.