Automatic Stabilizers Decrease the Impact of a Recession on the Level

question 91

Multiple Choice

Automatic stabilizers decrease the impact of a recession on the level of economic activity because they

• A)reduce the interest rate and so allow firms to increase their level of investment.
• B)increase taxes so the budget is always balanced.
• C)raise the exchange rate so U.S.exports become more attractive to foreigners.
• D)mean disposable income does not change by as much as real GDP.
• E)increase the quantity of money in circulation.

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Definitions:

Reliable Measure

A method or instrument that consistently produces stable and accurate results over time.

Intelligence

The capacity for learning, understanding, and applying knowledge and skills, and adapting to new situations.

Validity

The extent to which a test, measurement, or research study accurately measures what it is intended to measure.

Interrater Reliability

The degree of agreement among different raters or observers assessing the same phenomenon.