Question

QUESTION 12 and the aggregate price level During cost-push inflation, aggregate output rises; rises rises; falls falls; falls falls; rises QUESTION 13 The advantage of automatic stabilizers over discretionary fiscal policy is that automatic stabilizers: have the full consent of the legislature. have been vetted and approved by the courts. do not require overt action by policymakers. take longer to take effect than fiscal policy.

Answer 1

Answer 12:

Option D. The cost push Inflation leads to leftward shift of the aggregate supply curve in the economy, which reduces the level of national output in the economy and increases aggregate price level in the economy.

Answer 13:

Option C. The advantage of automatic stabilizers over discretionary fiscal policy is that automatic stabilizers do not require overt action by the policymakers because rates like income taxes, unemployment benefits are fixed in advance.