The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to 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 Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. O Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. O Businesses make investment plans many months in advance. The current tax system acts as an automatic stabilizer. Which of the following are examples of automatic stabilizers? Check all that apply. O Corporate income taxes O Unemployment insurance benefits O The federal funds rate O O O

Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter17: The Short-run Trade-off Between Inflation And Unemployment
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The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to
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 Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates.
O Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president.
O Businesses make investment plans many months in advance.
O The current tax system acts as an automatic stabilizer.
Which of the following are examples of automatic stabilizers? Check all that apply.
O Corporate income taxes
O Unemployment insurance benefits
O The federal funds rate
Transcribed Image Text:The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to 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 Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. O Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. O Businesses make investment plans many months in advance. O The current tax system acts as an automatic stabilizer. Which of the following are examples of automatic stabilizers? Check all that apply. O Corporate income taxes O Unemployment insurance benefits O The federal funds rate
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