If the Economy Has Automatic Stabilizers Built In, the Multiplier

question 77

Multiple Choice

If the economy has automatic stabilizers built in, the multiplier will

• A) be smaller than it would have been in the absence of automatic stabilizers.
• B) be larger than it would have been in the absence of automatic stabilizers.
• C) be zero.
• D) be infinitely larger than it would have been in the absence of automatic stabilizers.

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Definitions:

Semiannual Coupon

A bond or other fixed-income security that pays interest to the holder every six months.

Interest Rate

The price, in terms of a percentage of the principal, that a borrower needs to pay a lender to utilize their financial resources.

Bond's Price

The market price for which a bond is bought or sold, influenced by factors like interest rates, the bond's credit quality, and its maturity date.

Market Value Basis

The valuation of assets or securities based on the current market prices as opposed to historical costs or theoretical values.