An Automatic Stabilizer

question 32

Multiple Choice

An automatic stabilizer

• A) injects money into the economy during booms.
• B) extracts money from the economy during recessions.
• C) is exemplified by a program such as unemployment compensation.
• D) is exemplified by a program such as the Corps of Engineers dam-building program.

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Definitions:

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.

Cost of Goods Sold

The immediate expenses linked to the creation of goods sold by a business, which encompass costs for materials and labor.

Specific Identification

An inventory valuation method that tracks the cost of individual items for the purpose of determining cost of goods sold.

Inventory Valuation

The process of determining the monetary value of a company's inventory at the end of a reporting period.