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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'_
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