Automatic Stabilizers

question 74

Multiple Choice

Automatic stabilizers

• A) require action by Parliament.
• B) are triggered by a change in real GDP.
• C) involve only a change in government spending and no change in revenues.
• D) involve only a change in personal income tax rates.
• E) work during recessions but not during expansions.

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Definitions:

Good Y

A hypothetical product used in economics to model consumer choice, market interactions, or other economic scenarios alongside another good, typically referred to as Good X.

Consumer

An individual or group who purchases goods or services for personal use and not for manufacture or resale.

Good 2

Refers to a second good or item considered in a theoretical economic model, usually in the context of comparative analyses.

Fixed Ratio

A quantitative relationship between two or more variables where one variable is a fixed multiple of the others, often used to describe proportional relationships in finance and engineering.