During Periods of Expansion,automatic Stabilizers Cause Government Expenditures

question 68

Multiple Choice

During periods of expansion,automatic stabilizers cause government expenditures

• A)and taxes to fall.
• B)and taxes to rise.
• C)to rise and taxes to fall.
• D)to fall and taxes to rise.

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Definitions:

Interest Rate

The share of a loan subject to interest charges to the borrower, typically denoted as an annual percentage of the loan's outstanding sum.

Nominal Interest Rate

The stated interest rate on a loan or investment, not adjusted for inflation.

Rational Consumer

An assumption in economics that consumers aim to maximize their utility or satisfaction from consumption choices, given their budget constraints.

Cobb-Douglas Utility Function

A specific form of utility function used in economics to represent preferences, where utility is derived from a combination of goods, typically modeled with constants representing the elasticity of substitution between those goods.