Which of the following does not qualify as an automatic stabilizer in the economy?

Which of the following does not qualify as an automatic stabilizer in the economy?
 a. Lump-sum taxes
  b. Food stamps
  c. Welfare payments
  d. Progressive income taxes
  e. Unemployment compensation

Question 2

How will a decrease in price tend to affect supply?
 a. Supply will increase.
 b. Supply will decrease.
 c. Supply will not change.
  d. It is uncertain.

Question 3

Consumption expenditure tends to increase when consumers have higher levels of debt.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 4

Assume an economy has automatic stabilizers in place that include a progressive tax structure and a transfer payment system. Then in a period of high economic growth and high inflation, we would expect:
 a. tax revenues to fall and unemployment compensation to rise.
  b. average tax rates and welfare payments to decline.
  c. the national debt to become larger.
  d. average tax rates and government revenues to rise.
  e. government spending on social security benefits to rise.

Question 5

Which of the following would reduce the supply of computers?
 a. higher wage rates for the workers that assemble the computers
 b. a technological improvement that lowers the cost of producing the computers
  c. a reduction in the price of computer chips used to produce the computers
  d. All of the above would reduce the supply of computers.

Question 6

If the price level is fixed, then changes in nominal income will be equivalent to changes in real income.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 7

Under a progressive tax system:
 a. the average tax rate increases with increases in real GDP.
  b. the average tax rate remains constant with changes in real GDP.
  c. the average tax rate falls with increases in real GDP.
  d. government tax receipts increase when the economy is in a recession.
  e. government tax receipts decrease when the economy is expanding.

Question 8

Which of the following would be most likely to cause a reduction in the supply of Nintendo video games?
 a. a decrease in the price of Nintendo video games
 b. a decrease in the price of computer chips used to make Nintendo games
  c. an increase in the demand for Nintendo video games
 d. an increase in the price of computer chips used to make Nintendo games

Question 9

A given change in either someone's income or net taxes would have a greater effect on their consumption spending the greater their MPC.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 10

A major benefit of automatic stabilizers is that they:
 a. guarantee a balanced budget over the course of the business cycle.
  b. have a tendency to reduce the national debt.
  c. help increase recessionary gaps in the economy.
  d. moderate the effect of fluctuations in the business cycle.
  e. require legislative review by Congress before they can be implemented.