Chapter 30: Q.13 (page 741)
What is the main advantage of automatic stabilizers over discretionary fiscal policy?
Automatic stabilizers do not have the same time lags as discretionary fiscal policy.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
If the government gives a $300 tax cut to everyone in the country, explain the mechanism by which this will cause interest rates to rise.
What is the benefit of having state and local taxes on income instead of collecting all such taxes at the federal level?
What is the difference between discretionary fiscal policy and automatic stabilizers?
How would a balanced budget amendment affect a decision by Congress to grant a tax cut during a recession?
What would happen if contractionary fiscal policy were implemented during an economic boom but, due to lag,
it did not take effect until the economy slipped into recession?
What do you think about this solution?
We value your feedback to improve our textbook solutions.
