The presence of the automatic stabilizers means an increase in the budget deficit will be automatically experienced during a recession whereas a budget surplus will be automatically experienced during an economic expansion.
a. True
b. False
Indicate whether the statement is true or false
Question 2
According to rational expectations theory, what information do businesses and workers use when they form their expectations regarding inflation?
a. Recent events and data.
b. Keynesian and monetarist models.
c. Forecasts by public-and private-sector economists.
d. All the relevant information that is available.
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