Automatic Stabilizers Are So-Named Because

question 257

Multiple Choice

Automatic stabilizers are so-named because

• A) they are automatically undertaken by the Federal Reserve Bank to reduce budget deficits.
• B) they occur automatically when real GDP changes.
• C) the policy suggestions of the Council of Economic Advisors are automatically followed.
• D) the policy suggestions of the Office of Management and Budget are automatically followed.

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Definitions:

Settlement

The process of resolving a transaction, which in finance typically means the exchange of payment for goods or services.

Exchange Rates

The rate at which one currency can be exchanged for another.

Interest Rates

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, per period.