A Major Benefit of Automatic Stabilizers Is That They

question 64

Multiple Choice

A major benefit of automatic stabilizers is that they:

• A)guarantee a balanced budget over the course of the business cycle.
• B)have a tendency to reduce the national debt.
• C)help increase recessionary gaps in the economy.
• D)moderate the effect of fluctuations in the business cycle.
• E)require legislative review by Congress before they can be implemented.

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, which may differ from its market value.

Undervalued

A term used to describe assets or securities that are selling for a price presumed to be below their true intrinsic value.

Overvalued

A term used to describe securities or assets that are trading at a price higher than their intrinsic or fundamental value.