10. (The Multiplier and the Time Horizon) Explain how the steepness of the short-run aggregate supply curve affects the government’s ability to use fiscal policy to change real GDP.
11. (Automatic Stabilizers) Often during recessions, the number of young people who volunteer for military service increases. Could this rise be considered a type of automatic stabilizer? Why or why not?
12. (Permanent Income) “If the federal government wants to stimulate consumption by means of a tax cut, it should employ a permanent tax cut. If the government wants to stimulate saving in the short run, it should employ a temporary tax cut.” Briefly discuss this statement.