Automatic Stabilisers

question 28

Multiple Choice

Automatic stabilisers:

• A) reduce the problems that lags cause in using fiscal policy as a stabilisation tool
• B) are changes in fiscal policy that stimulate aggregate demand automatically when the economy goes into a recession
• C) are changes in fiscal policy that restrain aggregate demand automatically when the economy is growing too fast
• D) none of the above
• E) all of the above

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Definitions:

Mental Image

A representation in the mind of a sensory experience or object, enabling visualization or imagination of scenarios not physically present.

Rote List

A method of memorization through repetition without necessarily understanding the material being memorized.

Mental Image

A representation of a specific event or object, produced by the mind, that is not presently being sensed but is recalled or imagined.

Compact

An agreement or covenant between two or more parties.