Which of the Following Is True

question 217

Multiple Choice

Which of the following is true?

• A)Automatic stabilizers are used to eliminate recessions.
• B)Discretionary fiscal policy cannot eliminate a recession.
• C)Automatic stabilizers help to reduce the impact of a recession.
• D)Discretionary fiscal policy can automatically eliminate a recession.
• E)Automatic stabilizers make discretionary policy more effective by increasing the magnitude of the multipliers.

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Definitions:

Income Stocks

Stocks that regularly pay high dividends, typically associated with well-established companies with stable earnings.

Cash Dividends

Profits distributed to shareholders out of a company's earnings in the form of cash.

Large Capital Stocks

Shares issued by a company that represent significant equity ownership and investment in the company.

Cash Dividend

A payment made by a corporation out of its earnings to shareholders, usually in the form of cash.