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.

---

Definitions:

Invoice

A document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided.

Credit Purchase

The acquisition of goods or services with an agreement to pay later, usually within an agreed period.

Recorded

The act of entering financial transactions into the accounting records of a business.

Bill Paid

An event where an obligation, often recorded as an accounts payable, is settled by paying the outstanding amount.