Which of the Following Best Describes the Built-In Stabilizers as They

question 75

Multiple Choice

Which of the following best describes the built-in stabilizers as they function in Canada?

• A)The size of the balanced-budget multiplier varies inversely with the level of GDP.
• B)Personal and corporate income tax collections automatically fall and transfers and subsidies automatically rise as GDP rises.
• C)Personal and corporate income tax collections and transfers and subsidies all automatically vary inversely with the level of GDP.
• D)Personal and corporate income tax collections automatically rise and transfers and subsidies automatically decline as GDP rises.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income level, type of good, or service.

Government Spending

Government Spending encompasses all expenditure by government bodies and agencies, including investments, public services, and defense spending.

Aggregate Supply Curve

An illustrative depiction that exhibits the connection between total economic output and the general price level.

Real GDP

Real Gross Domestic Product measures the value of all final goods and services produced within a country's borders in a specific time period, adjusted for inflation.