Due to Automatic Stabilizers, When Income Rises, Government Transfer Spending

question 156

Multiple Choice

Due to automatic stabilizers, when income rises, government transfer spending:

• A)increases and tax revenues decrease.
• B)decreases and tax revenues increase.
• C)and tax revenues decrease.
• D)and tax revenues increase.

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Definitions:

Operating Assets

Assets employed in the day-to-day operations of a business that are expected to generate income.

Generates Revenues

The process of bringing in income from business activities, such as sales of goods and services.

Investment Center

An investment center is a business unit within an organization that is responsible for its own revenue, expenses, and investments, and its performance is assessed based on return on investment.

Performance Report

A document that compares actual operational or financial results to planned or budgeted results.