6. Automatic stabilizers a. increase the problems that lags cause in using fiscal policy as a stabilization tool. b. are changes in taxes or government spending that increase aggregate demand without requiring policy makers to act when the economy goes into recession. c. are changes in taxes or government spending that policy makers quickly agree to when the economy goes into recession. d. are changes in taxes or government spending that increase aggregate supply without requiring policy makers to act when the economy goes into recession. 7. Other things the same, if the long-run aggregate supply curve shifts right, prices a. and output both increase. b. and output both decrease. c. increase and output decreases. d. decrease and output increases. 8. If the MPC is 0.80, then an initial increase in aggregate demand of $100 billion will eventually shift the aggregate demand curve to the right by a. $80 billion. b. $100 billion. c. $500 billion. d. $800 billion. 9. If the MPC is 0.80, then an initial decrease of taxes of $100 billion will eventually shift the aggregate demand curve to the right by a. $80 billion. b. $100 billion. c. $400 billion. d. $800 billion. 10. An IS curve shows combinations of: a. taxes and government spending. b. nominal money balances and price levels. c. interest rates and income that bring equilibrium in the market for real balances. d. interest rates and income that bring equilibrium in the market for goods and services.