Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Chapter 11, Problem 8CQ
To determine
The automatic stabilizers and its advantage.
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Which of the following is NOT an automatic stabilizer? a. income taxes b. unemployment insurance c. Medicaid d. food stamps e. monetary policy
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How do automatic stabilizers work?
How do automatic stabilizers work
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Chapter 11 Solutions
Economics: Private and Public Choice
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- Is Medicaid (federal government aid to low-income families and individuals) an automatic stabilizer?arrow_forwardWhy do automatic stabilizers function automatically?arrow_forwardBriefly discuss how time lag could be an argument against policy activism. What is the role of automatic stabilizer in this context? Explain with examplesarrow_forward
- Which of the following are examples of automatic stabilizers? Check all that apply. Personal income taxes Corporate income taxes The discount ratearrow_forwardUnemployment insurance and welfare programs work as automatic stabilizers. True Falsearrow_forwardWhy is getting the magnitude, or dollar size, of the policy change just right the most difficult thing to do when implementing discretionary fiscal policy?arrow_forward
- How relevant is the multiplier concept to the implementation of expansionary and contractionary fiscal policies?arrow_forwardCan you indicate 2 built in stabilizers and show they function during a recession and expansion.arrow_forwardIf government policy makers were worried about the inflationary potential of the economy, which of the following would be a correct fiscal policy change?arrow_forward
- What are the three fiscal policy tools and how would each be used to counter a contractionary gap?arrow_forwardWhich of the following is NOT an automatic stabilizer? income taxes transfers for welfare payments unemployment insurance benefits government spending on educationarrow_forwardExplain what is Fiscal policy and how to use it in order to overcome the current inflationary situation of the countryarrow_forward
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