Refer to the Following Figure When Answering the Following Questions

question 1

Multiple Choice

Refer to the following figure when answering the following questions.
Figure 12.4: Phillips Curve
-Consider the Phillips curve in Figure 12.4. At point a, the economy is ________; at point c, the economy is ________.

• A) in recession; booming
• B) in recession; in recession
• C) in recession; in its long-run equilibrium
• D) booming; in recession
• E) in its long-run equilibrium; in recession

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Definitions:

Automatic Stabilizers

Economic policies and programs designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers, such as unemployment insurance and progressive taxation.

National Income

The total value of all goods and services produced by a country over a specific time period, adjusted for net income from foreign investments.

Federal Budget Deficit

The shortfall when a government's expenditures exceed its revenues within a specified fiscal period.

National Debt

The aggregate financial borrowing of a country's government, acquired through multiple methods.