The standardized employment deficit is described as eliminating the impact of:
AThe national debt limit
BThe automatic stabilizers
CAll discretionary policy
DThe corporate income tax
Answer & Solution
Correct answer: B. The automatic stabilizers
1. One measure strips out the part of the deficit that moves with the cycle.
2. Automatic stabilizers change the deficit as the economy expands or contracts.
3. That makes the raw deficit hard to read as a policy choice.
4. In effect, the standardized employment deficit eliminates the impact of the automatic stabilizers.
5. What remains reflects deliberate policy.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 16 'Government Budgets and Fiscal Policy'_
Keep practising Government Budgets and Fiscal Policy
Browse all Government Budgets and Fiscal Policy questions for AP Macroeconomics, or explore more Economics topics.
Related questions
Complete the fiscal rulesMatch each fiscal termStack the budget termsSort the taxes by typePull the rope to the right policyAn economy in recession would call for which kind of fiscal policy under the aggregate demA tax that is proportional at low incomes but regressive above a wage limit describes the:The very large budget deficit in 2009 is attributed to a combination of discretionary poli