Automatic Stabilizers Are So-Named Because

question 257

Multiple Choice

Automatic stabilizers are so-named because

• A) they are automatically undertaken by the Federal Reserve Bank to reduce budget deficits.
• B) they occur automatically when real GDP changes.
• C) the policy suggestions of the Council of Economic Advisors are automatically followed.
• D) the policy suggestions of the Office of Management and Budget are automatically followed.

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Definitions:

Identical Products

Goods that are exactly the same in every feature, allowing them to be perfect substitutes for one another in the market.

Oligopoly

A market structure where a few firms dominate the market, resulting in minimal competition and a large share of the market controlled by these firms.

Imperfect Competition

A market structure where the conditions of perfect competition are not met, characterized by a heterogeneous product or a limited number of sellers.

Price Takers

Companies or individuals who accept the prevailing prices in the market because they do not have enough market power to influence the price of an item themselves.