The economic impact of ________ during inflationary periods is to moderate upward pressure on price levels.

Question

Quizplus · Accepted Answer

Automatic stabilizers, such as unemployment benefits and progressive income taxes, help to reduce the negative effects of inflation by providing a cushion for individuals and stabilizing consumer spending. This can help moderate upward pressure on prices by reducing the overall demand for goods and services. Tax cuts and increases in the money supply can actually contribute to inflationary pressures, while positive demand shocks can exacerbate inflation.

The Economic Impact of ________ During Inflationary Periods Is to Moderate