Automatic Stabilizers

question 149

Multiple Choice

Automatic stabilizers

• A)are probably insufficient to completely offset strong recessionary pressures.
• B)tend to accelerate abrupt changes in economic activity and cause expenditures to move pro-cyclically.
• C)give policy makers more time to formulate nondiscretionary policy.
• D)are unimportant to those workers most likely to be laid off or otherwise harmed by recessions.

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Definitions:

Prospect Theory

A theory in behavioral economics that evaluates how people choose between probabilistic alternatives that involve risk.

Framing

The way information is presented or structured, which can significantly influence decision-making processes and perceptions.

Market Fundamentals

The basic qualitative and quantitative factors that influence the price and structure of a financial market or asset.

Technical Analysts

Financial professionals who evaluate securities by analyzing statistics generated by market activity, such as past prices and volume.