Automatic Stabilizers Have the Effect of

question 181

Multiple Choice

Automatic stabilizers have the effect of

• A) increasing aggregate demand during a recessionary gap.
• B) increasing aggregate demand during an inflationary gap.
• C) increasing long-run aggregate supply during a recessionary gap.
• D) increasing long-run aggregate supply during an inflationary gap.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, affecting the company's liquidity.

Financing Activities

Transactions related to raising capital and repaying investors, including issuing equity, borrowing, and repaying debt.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's assets and earnings.

Cash Dividends

Cash dividends are payments made by a corporation to its shareholders, usually as a distribution of profits.