Automatic Stabilizers Act Like

question 320

Multiple Choice

Automatic stabilizers act like:

• A)automatic expansionary fiscal policy when the economy is in inflation.
• B)automatic expansionary fiscal policy when the economy is in a recession.
• C)an additional multiplier effect.
• D)automatic contractionary policy when the economy is in a recession.

---

Definitions:

Bilateral Aid

A form of financial assistance provided by one country directly to another to support development and welfare projects.

Multilateral Aid

Financial assistance provided by multiple countries or international institutions to support economic development in developing countries.

Convergence Theory

The hypothesis that poorer economies will tend to grow at faster rates than wealthier economies, leading to a convergence of income levels over time.

Developing Countries

Nations with lower levels of industrialization, lower standards of living, and lower Human Development Index ratings compared to developed countries.