The marginal propensity to consume is a measure of the additional consumption that results from a one-dollar increase in disposable income.
a. True
b. False
Indicate whether the statement is true or false
Question 2
Which of the following is true about automatic stabilizers?
a. Automatic stabilizers are a part of discretionary fiscal policy.
b. The federal funds rate is an example of an automatic stabilizer.
c. An automatic stabilizer is any program that responds to fluctuations in the business cycle in a way that moderates the effects of those fluctuations.
d. Any kind of trade policy adopted by the government will be considered as an automatic stabilizer.
e. When income rises, automatic stabilizers increase/boost spending.
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