True or False 1. Savings is always good for the economy. 2. Automatic stabilizer

Question

True or False

1. Savings is always good for the economy.

2. Automatic stabilizers work on the economy without new laws being passed.

3. Recognition lag is usually the largest time delay for fiscal policy.

4. Crowding in is the opposite of crowding out.

5. Running a deficit decreases the national debt.

6. The Keynesians felt automatic stabilizers were sufficient to stabilize the economy.

7. Savings is the only source of leakage in the basic Keynesian multiplier.

8. U.S. unemployment benefits cover most unemployed workers.

9. Unemployment benefits and corporate income tax are examples of automatic stabilizers.

10. Fiscal policy can change Aggregate Demand and real GDP in the Keynesian model.

Explanation / Answer

1 False (Saving to a limit is good for economy)

2 True

3 False

4 False

5

6

7

8

9

10

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