1.Examine whether the following items are built-in stabilizers or discretionary changes.
(a) Unemployment benefits
(b) Tax cuts
(c) An increase in government spending on road work
(d) Progressive tax system
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2. What fiscal policy is most likely to be invoked during a period of recession and high unemployment? A period of rapid inflation?
3. Use the figures in the table below to answer the following questions.
Small time deposits
Money-market mutual funds held by businesses
Savings deposits, including money-market deposit accounts
Money-market mutual funds held by individuals