The government possesses the tools necessary to influence the output level in the short run through use of monetary and fiscal policy. However, there 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. -Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses. -Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. -The current tax system acts as an automatic stabilizer. -Businesses make investment plans many months in advance. Which of the following policies are examples of automatic stabilizers? Check all that apply. -The discount rate -Corporate income taxes -The federal funds rate
The government possesses the tools necessary to influence the output level in the short run through use of monetary and fiscal policy. However, there 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. -Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses. -Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. -The current tax system acts as an automatic stabilizer. -Businesses make investment plans many months in advance. Which of the following policies are examples of automatic stabilizers? Check all that apply. -The discount rate -Corporate income taxes -The federal funds rate
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter36: Six Debates Over Macroeconomic Policy
Section: Chapter Questions
Problem 1PA
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The government possesses the tools necessary to influence the output level in the short run through use of monetary and fiscal policy. However, there 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.
-Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses.
-Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president.
-The current tax system acts as an automatic stabilizer.
-Businesses make investment plans many months in advance.
Which of the following policies are examples of automatic stabilizers? Check all that apply.
-The discount rate
-Corporate income taxes
-The federal funds rate
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