When Output Deviates from Potential GDP, Automatic Stabilizers Work to Push

question 102

Multiple Choice

When output deviates from potential GDP, automatic stabilizers work to push the economy:

• A) in the same direction that correctly timed and formulated discretionary policy would.
• B) in the opposite direction that correctly timed and formulated discretionary policy would.
• C) in unpredictable ways, causing a need for discretionary policy.
• D) even further from its long-run equilibrium.

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Definitions:

Postconventional Level

A stage of moral development in which individuals' moral reasoning is based on internal principles, and societal rules are questioned rather than followed blindly.

Moral Development

Moral development involves the changes in a person's sense of justice and moral reasoning as they grow, influenced by cultural, familial, and educational factors.

Principle-centred

An approach that bases personal and organizational behavior on enduring values and universal principles.

Organization's Best Interests

The activities, decisions, or policies that are considered most beneficial or advantageous for the overall success and sustainability of an organization.