The Canadian Tax and Transfer System Acts as an Automatic

question 74

Multiple Choice

The Canadian tax and transfer system acts as an automatic stabilizer because

• A)tax rates will automatically increase to stimulate the economy during economic recessions.
• B)tax rates will automatically increase if the government is running deficits.
• C)tax rates will automatically decrease to stimulate the economy during economic booms.
• D)net tax revenues increase during economic booms and decrease during economic recessions.
• E)net tax revenues decrease during economic booms and decrease during economic recessions.

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Definitions:

Manufacturing Overhead

Costs related to the manufacturing process that are not directly tied to the product being made, such as the cost of maintaining factory equipment.

Utility Costs

Expenses generated from the consumption of utilities such as electricity, water, and gas.

Maintenance Costs

Expenses incurred in the upkeep of machinery, equipment, and facilities to ensure their efficient and effective operation.

Journal Entries

Records of financial transactions in the double-entry bookkeeping system, noting debits and credits for each transaction.