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, th 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. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. Businesses make investment plans many months in advance. The current tax system acts as an automatic stabilizer. Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses. Which of the following policies are examples of automatic stabilizers? Check all that apply. O Corporate income taxes O Unemployment insurance benefits O Personal income taxes
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, th 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. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. Businesses make investment plans many months in advance. The current tax system acts as an automatic stabilizer. Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses. Which of the following policies are examples of automatic stabilizers? Check all that apply. O Corporate income taxes O Unemployment insurance benefits O Personal income taxes
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
Section: Chapter Questions
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