Automatic Stabilizers Refer to

question 65

Multiple Choice

Automatic stabilizers refer to

• A)the Fed's monetary policy rule.
• B)the self-adjusting nature of a market economy.
• C)the fact that Congress is called into session whenever there is a recession.
• D)taxes and government spending that change automatically whenever the state of the economy changes.
• E)the tendency for changes in inflation to return the economy to potential GDP.

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Definitions:

Separation of Power

A constitutional principle that divides the responsibilities of government among distinct branches to prevent the concentration of power and ensure checks and balances.

Legislative Branch

One of the three branches of the U.S. government, responsible for making and enacting laws, consisting of the Senate and the House of Representatives.

Enabling Legislation

The statute by which a legislative body creates an administrative agency.

Administrative Procedure Act (APA)

A federal law in the United States that governs the way administrative agencies of the federal government propose and establish regulations.