An Example of Automatic Fiscal Policy Is When

question 74

Multiple Choice

An example of automatic fiscal policy is when

• A)the government drafts a bill to reduce defence spending.
• B)Parliament decides to cut government expenditure.
• C)tax revenues decrease as real GDP decreases.
• D)Parliament passes a law that raises tax rates.

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Definitions:

Assets

Resources owned or controlled by a business, expected to generate future economic benefit.

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet until earned.

Service Revenue

Income earned by a company for the services it provides to its customers.

Accounts Receivable

Money owed to a business by its clients for goods or services that have been delivered but not yet paid for.