Automatic stabilizers reduce fluctuations in GDP by
A) eliminating spending shocks
B) increasing the amount of spending each year
C) reducing the additional spending that occurs in each round of the multiplier
D) increasing saving
E) reducing the need for government involvement in the economy

Question

Quizplus · Accepted Answer

Reducing the additional spending that occurs in each round of the multiplier reduces fluctuations in GDP.

Automatic Stabilizers Reduce Fluctuations in GDP by