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Which of the Following Best Characterizes the Role of Automatic

Question 155

Multiple Choice

Which of the following best characterizes the role of automatic stabilizers?  


A)  They require ongoing decisions about government purchases and taxation in order to promote full employment and price stability. 
B)  They include the unemployment insurance program, which helps reduce the negative effects of unemployment. 
C)  They tend to stimulate aggregate demand when the economy is experiencing an expansionary gap. 
D)  They include tax cuts passed by Parliament in order to ease a current recession in an economy that has a proportional income tax.

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