Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

8. Using policy to stabilize the economy The government possesses the tools necessary to influence the output level in the short run through use of

image text in transcribed
image text in transcribed
8. Using policy to stabilize the economy The government possesses the tools necessary to influence the output level in the short run through use of monetary and fiscal policy. However, there is some debate regarding whether the government should attempt to stabilize the economy. Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply. O The current tax system acts as an automatic stabilizer. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses. O Businesses make investment plans many months in advance. Which of the following policies are examples of automatic stabilizers? Check all that apply. O Unemployment insurance benefits Personal income taxes Corporate income taxes

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Econometrics A Modern Approach

Authors: Jeffrey Wooldridge

7th Edition

1337558869, 978-1337558860

Students also viewed these Economics questions

Question

1. Build trust and share information with others.

Answered: 1 week ago