Ch 14 Fashcardsa G Econ Chapter 13 Has unity collTake Test: Quiz 13 Cha XEcon eb

Question

Ch 14 Fashcardsa G Econ Chapter 13 Has unity collTake Test: Quiz 13 Cha XEcon ebapps assessment take lau pensation are bothNo results chJsp?course assessment id--33090 74-1 & course d1075451-18 content id. 1064085 10 1 Options v Question Completion Status: private stabilization effects QUESTION 14 Automatic stabilizers have the effect of O a increasing long-run aggregate supply during a recessionary gap. O b. increasing aggregate demand during an inflationary gap. increasing aggregate demand during a recessionary gap. O d increasing long-run aggregate supply during an inflationary gap. Click Save and Submit to save and submit. Click Save All Answers to save all answers. Sav

Explanation / Answer

c is the correct option

Reason

Automatic stabilizers are features of the structure of modern government budgets, particularly income taxes and welfare spending, that act to dampen fluctuations in real GDP. Here, in recessionary gap, increasing the aggregate demand will push the economy towards the potential level.

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