What are macroeconomic automatic stabilizers? What are the main types of automatic stabilizers? (Please name and...

What are macroeconomic automatic stabilizers? What are the main types of automatic stabilizers? (Please name and explain the mechanisms of at least three types of such stabilizers). How do they work? Could they be helpful tools of macroeconomic policy? Please explain.

Expert Solution

Rahul Sunny answered 2 years ago

a. What are automatic fiscal stabilizers? How do these stabilizers stabilize real GDP in the face of...

a. What are automatic fiscal stabilizers? How do these stabilizers stabilize real GDP in the face of AD and AS shocks? b. What is the role of the simple multiplier [ 1/{1 - MPC(1 - t) - m}] in stabilization of the swings in real GDP? c. How the slope of the AD curve affects the stability of real GDP in the presence of AS shocks? d. How the automatic stabilizers depend on the sizes of MPC, t, and m.

why is there no time lag for automatic stabilizers?

In fiscal policy, what are automatic stabilizers? Give two examples.

What is the difference between automatic stabilizers and discretionary fiscal policy?

Three of the following are Automatic Stabilizers. Which is not? A. Something built into the federal...

Three of the following are Automatic Stabilizers. Which is not? A. Something built into the federal budget to stabilize the economy B. unemployment insurance C. Demand side Fiscal policy D. Progressive income tax Keynes argued AD is unstable because A.As is unimportant B. Fiscal policy makes it that way C. Business have too much influence D. the self correcting market is dominant If the government cuts taxes, they are engaging in A.decreasing AS B. decreeing AD C. Expansionary Fiscal Policy...

What is the difference between discretionary fiscal policy and automatic stabilizers? Be careful to define each...

What is the difference between discretionary fiscal policy and automatic stabilizers? Be careful to define each carefully. What are the advantages and disadvantages of each?

a. Built-in (or automatic) stabilizers work by changing ______ so that changes in GDP are reduced....

a. Built-in (or automatic) stabilizers work by changing ______ so that changes in GDP are reduced. multiple choice 1 government payouts and interest rates taxes and government payouts interest rates and investment wages and prices b. What type of tax system would have the most built-in stability? multiple choice 2 A progressive tax because it increases at an increasing rate as incomes rise, thus having more of a dampening effect on rising (or falling) incomes. A regressive tax since it...

Which of the following statements is correct regarding automatic stabilizers? Select one: a. They indicate that...

Which of the following statements is correct regarding automatic stabilizers? Select one: a. They indicate that tax collections, subsidies, and transfer payments vary inversely with the level of GDP. b. When GDP increases, tax collections automatically decrease and subsidies and transfer payments automatically increase. c. When GDP decreases, tax collections automatically decrease and subsidies and transfer payments automatically increase. d. They indicate that the size of the multiplier varies inversely with the level of GDP. If the government faces inflation,...

1. Fill in the blanks: Unemployment benefits act as an "automatic stabilizers" (at least from a...

1. Fill in the blanks: Unemployment benefits act as an "automatic stabilizers" (at least from a Keynesian point of view) because they cause ___ to automatically go ___ when the economy starts to fall into a recession. A) taxes ; up B) government spending ; up C) government spending ; down D) taxes ; down 2. Fill in the blanks: Progressive taxation acts as an "automatic stabilizers" (at least from a Keynesian point of view) because it causes ___ to...

Describe how certain aspects of fiscal policy function as automatic stabilizers for the economy.

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