Automatic Stabilizers Reduce Fluctuations in GDP by

question 2

Multiple Choice

Automatic stabilizers reduce fluctuations in GDP by

• A) eliminating spending shocks
• B) increasing the amount of spending each year
• C) reducing the additional spending that occurs in each round of the multiplier
• D) increasing saving
• E) reducing the need for government involvement in the economy

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Definitions:

Pork Barrel

Government spending for localized projects secured primarily to bring money to a representative's district, often criticized as wasteful and politically motivated.

Government Loan Subsidies

Financial support from the government that reduces the cost of borrowing for certain individuals, businesses, or sectors.

Special-Interest Effects

The impact of policies or actions that benefit a small group at the expense of the general public, often due to lobbying or political influence.

Mohair Production

The process of producing yarn or fabric from the hair of the Angora goat.