During an Expansion, Which of the Following Occur Because of Automatic

question 123

Multiple Choice

During an expansion, which of the following occur because of automatic stabilizers?
I. Income tax revenues tend to rise.
II. Government transfer payments tend to rise.
III. The government's budget deficit tends to fall or its budget surplus tends to rise.
IV. They tend to amplify the rise in real GDP.

• A) I and III only
• B) I, II, and III only
• C) I, III, and IV only
• D) I, II, III, and IV

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Definitions:

Uses of Markets

The functions markets serve in allowing buyers and sellers to exchange goods, services, and information, facilitating the allocation of resources.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price.

Increase in Demand

A situation where more of a good or service is desired by consumers at all price levels, shifting the demand curve rightward.

Quantity Supplied

The quantity of a product or service that suppliers are ready and capable of offering for sale at a specific price during a defined time frame.