Problem
1. Automatic Stabilizers Distinguish between discretionary fiscal policy and automatic stabilizers. Provide examples of automatic stabilizers. What is the impact of automatic stabilizers on disposable income as the economy moves through the business cycle?
2. Fiscal Policy Effectiveness Determine whether each of the following would make fiscal policy more effective or less effective:
a. A decrease in the marginal propensity to consume
b. Shorter lags in the effect of fiscal policy
c. Consumers suddenly becoming more concerned about permanent income than about current income
d. More accurate measurement of the natural rate of unemployment
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.