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 towhether 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.The current tax system acts as an automatic stabilizer.Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president.Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses.Which of the following are examples of automatic stabilizers? Check all that apply.O Unemployment insurance benefitsThe federal funds rateCorporate income taxesO O O

Active stabilization policy by the government can be defined as the policy to maintain economic growth and price level in the economy. The arguments A and B favor the active stabilization policy by the government. Option A and C are the examples of automatic stabilizer.

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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 The current tax system acts as an automatic stabilizer. O Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses. Which of the following are examples of automatic stabilizers? Check all that apply. O Unemployment insurance benefits O The federal funds rate O Corporate income taxes

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 The current tax system acts as an automatic stabilizer. O Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses. Which of the following are examples of automatic stabilizers? Check all that apply. O Unemployment insurance benefits O The federal funds rate O Corporate income taxes

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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