Which of the Following Is an Example of an Automatic

question 148

Multiple Choice

Which of the following is an example of an automatic stabilizer?

• A)The reduction in the money supply that occurs as banks become less willing to make loans during a recession
• B)The reduction in real wages that occurs as the economy goes into a recession
• C)The increase in government spending that occurs as the result of new spending bills passed by Congress
• D)The rise in tax revenue that occurs as a result of growth in real GDP
• E)All of the choices are examples of an automatic stabilizer.

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