Because of Automatic Fiscal Policy, When Real GDP Decreases

question 228

Multiple Choice

Because of automatic fiscal policy, when real GDP decreases

• A) government expenditures decrease and tax revenues increase.
• B) government expenditures increase and tax revenues decrease.
• C) government expenditures equal tax revenues.
• D) the economy will automatically go to full employment.

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Definitions:

Assignment

The passing of obligations, rights, or property from one individual to another.

Adjudicated Incompetent

A legal status determined by a court, indicating that an individual lacks the capacity to manage their own affairs due to mental or physical impairment.

Capacity

Refers to the legal ability of a person to enter into binding contracts.

Judicial Lien

A judicial lien is a lien obtained by a creditor through court action, usually after winning a judgment against the debtor, granting the creditor a legal claim on the debtor's property as security for the debt.