Which of the Following Is an Automatic Stabiliser

question 109

Multiple Choice

Which of the following is an automatic stabiliser?

• A)Interest rate changes.
• B)Increases in government spending on schools.
• C)Reductions in nominal wages as inflation rates rise.
• D)Unemployment benefit payments to the unemployed.

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a specified time period.

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period.

Labor Force

The total number of people employed or seeking employment in an economy at a given time.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to produce goods or services and achieve its objectives.