Automatic Stabilizers

question 112

Multiple Choice

Automatic stabilizers

• A) cushion the decrease in after- tax income when a recession occurs.
• B) magnify the increase in after- tax income when a boom occurs.
• C) require the government use discretionary policy, such as increasing or decreasing government expenditures.
• D) require the government to balance the budget.

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Definitions:

Fees

Charges imposed by service providers on consumers for the services offered.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Operating Expenses

Costs associated with the day-to-day operations of a business, including rent, utilities, and payroll.

Customer-Led Pricing

A pricing strategy that asks customers how much they are willing to pay and then offers the product at that price.