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:

Markets

Platforms or systems where buyers and sellers interact to trade goods, services, securities, or other assets.

Call Option Valuation

The process of determining the value of a call option, which gives the holder the right, but not the obligation, to buy an asset at a specified price within a specific time frame.

Slope Approaches

Techniques used to determine the direction and rate of change in data, often applied in statistical and economic models.

Stock's Price

The current market value at which a share of a particular stock can be bought or sold.