The Advantage of Automatic Stabilizers Is That They

question 235

Multiple Choice

The advantage of automatic stabilizers is that they

• A) help to balance the budget.
• B) reduce the size of the net public debt.
• C) reduce the fluctuations in the business cycle.
• D) help reduce the inflation rate.

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Definitions:

Circular Flow Diagram

A visual model that illustrates the economic interactions between different sectors in an economy, showing how money flows through the system.

Factors Of Production

The resources, including land, labor, capital, and entrepreneurship, that are used in the production of goods and services.

Production Possibilities Curve

A graphical representation showing the maximum combination of goods and services that can be produced from a fixed set of resources in a given period.

Opportunity Cost

Represents the value of the next best alternative forgone when a decision is made to choose one option over others.