Automatic Stabilizers Include

question 189

Multiple Choice

Automatic stabilizers include

• A)changes in induced taxes and changes in needs-tested spending.
• B)increases or decreases of tax rates and changes in needs-tested spending.
• C)changes in induced taxes and changes in discretionary spending.
• D)changes in discretionary spending and changes in needs-tested spending.
• E)changes in the federal funds interest rate brought about by Fed policy.

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Definitions:

High Consumption-Low Investment

This term refers to an economic situation where a country or entity spends a significant portion of its income on consumption rather than investing in capital goods that could contribute to future growth.

High Investment-Low Consumption

An economic strategy or situation that focuses on higher levels of investment in capital and infrastructure while maintaining lower levels of consumer spending.

Marginal Benefit

The additional satisfaction or utility that an individual gains from consuming one more unit of a good or service.

Marginal Cost

The additional expenditure involved in producing one additional unit of a good or service.