To Determine the Size of the Automatic Stabilizer in 2011

question 7

Multiple Choice

To determine the size of the automatic stabilizer in 2011,

• A)calculate the difference between the taxes and spending proposed for 2011 and the actual taxes and spending in 2011.
• B)compare the budget proposed by the president with the budget passed by Congress.
• C)compare the size of the budget calculated by the president with the size of the budget calculated by the Congressional Budget Office (CBO).
• D)read the language of the FY2011 Budget.
• E)None of these

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Definitions:

Operating Income

Operating income is the amount of profit realized from a business's core operations, excluding taxes and interest expenses.

Negative Net Cash Flow

A situation where a company's outgoing cash exceeds the incoming cash during a specific period, indicating potential financial trouble.

Financial Statements

Structured reports that detail the financial performance of an organization, typically including the balance sheet, income statement, and cash flow statement.

Depreciation Expenses

The allocation of the cost of tangible assets over their useful lives, recognized as an expense on the income statement.