Automatic stabilizers include: Open market operations. Unemployment benefits. De

Question

Automatic stabilizers include: Open market operations. Unemployment benefits. Deregulation. Tax cuts. When two countries face straight-line production possibilities curves with different slopes, The opportunity costs of the goods in terms of each other will differ between the two Neither can have an absolute advantage in producing one good or the other. Neither can have a comparative advantage in producing one good or the other. Specialization will not permit greater consumption even though trade occurs. A fiscal policy cure for inflation includes: A reduction in government spending. An increase in the reserve requirement. Reductions in marginal tax rates for corporations and households. Infrastructure development.

Explanation / Answer

28) B

Unemployment benefits is stated here for only one reason, These benefits are not direct government actions for stablizing economy, but they act as cushion. Other options are actions by government responding to crisis, so are not automatic

29) a

Slope = Y/X

They both have straight line but different slopes that means that their ability to produce differ. It could be like production capability of USA vs Production capability of iceland.

30) A

As you were talking about fiscal policy then it is A, If you were talking about monetary policy it is B, Government spending comes under fiscal policy where as monetary policy is something that comes under federal reserve.

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