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

question 61

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:

Stale Checks

Checks that have not been cashed or deposited within a certain period, typically six months, and may not be honored by a bank.

Antedated Checks

Checks written with a date earlier than the actual date of writing, often used in accounting to reflect a transaction that occurred at an earlier time.

Postdated Checks

Checks written with a future date, implying they cannot be cashed or deposited until that date arrives.

Insufficient Funds

A situation where one's bank account does not have enough money to cover checks or electronic transfers made against it, potentially resulting in a bounced check or declined transactions.