Question 41 2.5 pts Which of the following is true about automatic stabilizers? O Automatic stabilizers are a part of discretionary fiscal policy. An automatic stabilizer is any program that responds to fluctuations in the business cycle in a way that moderates the effects of those fluctuations. Any kind of trade policy adopted by the government will be considered as an automatic stabilizer. O When income rises, automatic stabilizers increase boost spending. Question 42 2.5 pts Suppose the equilibrium level of income exceeds the full employment level of income and there is high inflation. Hence, the government decides to implement a fiscal policy that will act to reduce national output and prices. This can be accomplished by: increasing government spending such that aggregate expenditures are increased. () raising taxes and government spending by the same amount such that aggregate supply is decreased and aggregate demand is increased. O decreasing government spending such that aggregate demand is reduced. O lowering average tax rates such that aggregate supply is increased O increasing transfer payments such that aggregate expenditures decline. D Question 43 2.5 pts If disposable income rises from $15,000 to $20,000 and the marginal propensity to consume equals 0.85, then saving must increase by: $500 $750 $1,000 $2,000 $4,250