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 statements regarding the debate over stabilization policy are correct? Check all that apply. O Opponents of active stabilization policy believe that significant time lags in both fiscal and monetary policy often exacerbate economic fluctuations. Advocates of active stabilization policy believe that the government can adjust monetary and fiscal policy to counteract waves of excessive optimism and pessimism among consumers and businesses. O Advocates of active stabilization believe that implementation lags for fiscal and monetary policy do not exist. O Advocates of active stabilization believe that automatic stabilizers have no effect on aggregate demand. Which of the following policies are examples of automatic stabilizers? Check all that apply. O The federal funds Unemployment insurance benefits

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 statements regarding the debate over stabilization policy are correct? Check all that apply. O Opponents of active stabilization policy believe that significant time lags in both fiscal and monetary policy often exacerbate economic fluctuations. Advocates of active stabilization policy believe that the government can adjust monetary and fiscal policy to counteract waves of excessive optimism and pessimism among consumers and businesses. O Advocates of active stabilization believe that implementation lags for fiscal and monetary policy do not exist. O Advocates of active stabilization believe that automatic stabilizers have no effect on aggregate demand. Which of the following policies are examples of automatic stabilizers? Check all that apply. O The federal funds Unemployment insurance benefits

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 3PA

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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, 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. The current tax system acts as an automatic stabilizer. Businesses make investment plans many months in advance. 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. Which of the following policies are examples of automatic stabilizers? Check all that apply. Personal income taxes The discount rate The federal funds rate