Adjustments to economic policy designed to counteract small changes in economic outcomes are known as:
A) Automatic stabilizers.
B) Rational expectations.
C) Fine-tuning.
D) The business cycle.

Question

Quizplus · Accepted Answer

Fine-tuning is the adjustment of economic policies in response to small changes in the economy to maintain its stability. This can include changes to monetary policy, such as interest rates, or fiscal policy, such as taxes and government spending. Automatic stabilizers refer to existing policies, such as unemployment benefits or progressive taxes, that automatically help stabilize the economy during a downturn without the need for further government intervention. Rational expectations is a theory that suggests people make decisions based on their rational analysis of available information. The business cycle is the pattern of economic expansion and contraction over time.

Adjustments to Economic Policy Designed to Counteract Small Changes in Economic