Transfer Payments Made by Governments Over the Business Cycle in the United

question 12

Multiple Choice

Transfer payments made by governments over the business cycle in the United States

• A) move procyclically with GDP because they are constructed to increase or decrease automatically as tax receipts climb or fall with GDP.
• B) move countercyclically with GDP because they are constructed to increase or decrease automatically as changes in GDP cause corresponding changes in the number of people eligible for payment.
• C) are not well correlated with changes in GDP in part because the discretionary power to enact changes in fiscal policy is diluted across too many congressional committees.
• D) vary directly with tax revenues and therefore play no role in stabilization policy.
• E) none of the above.

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Definitions:

BFOQ Defense

Bona Fide Occupational Qualification Defense, a legal principle allowing discrimination in hiring if it is reasonably necessary to the normal operation of that particular business.

Prima Facie

A legal term indicating that upon initial examination, there is sufficient evidence to prove a case unless disproved by opposing evidence.

Title VII

A section of the Civil Rights Act of 1964 that prohibits employment discrimination based on race, color, religion, sex, or national origin.

Quid Pro Quo

A Latin term meaning "something for something," indicating a mutual agreement where each party receives something of value in exchange for something else.