The primary benefit of the automatic stabilizers is:

Group of answer choices

they provide public assistance through legislative decision making.

they require no new legislative action, so there is no legislative lag before these tools respond to fluctuations in the business cycle.

they require legislative action, so there is a lag in response to these tools to fluctuations in the business cycle, and there is time to identify the spillover effects.

none of the above.

The primary benefit of the automatic stabilizers is:

Group of answer choices

they provide public assistance through legislative decision making.

they require no new legislative action, so there is no legislative lag before these tools respond to fluctuations in the business cycle.

they require legislative action, so there is a lag in response to these tools to fluctuations in the business cycle, and there is time to identify the spillover effects.

none of the above.

Scenario 10.1

Imagine an economy that does not have international trade and is initially in equilibrium. Later the government increases the level of spending by $350 million because it received a gift from abroad. In this economy, only 75 cents of every dollar is spent, and the rest is saved.

Refer to Scenario 10.1. What is the marginal propensity to save for this economy?

Group of answer choices

0.75

0.25

0.65

0.35

Cannot be determined