Automatic Stabilizers "Lean Against the Prevailing Wind" of the Business

question 86

Multiple Choice

Automatic stabilizers "lean against the prevailing wind" of the business cycle because:

• A) wages are controlled by the minimum wage law.
• B) federal expenditures and tax revenues change as the level of real GDP changes.
• C) the spending and tax multipliers are constant.
• D) they include the power of special interests.

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Definitions:

Project Value

The total worth of a project, calculated by evaluating all incoming and outgoing cash flows to determine its overall financial benefit.

Cost Reduction

Refers to strategies and actions a company undertakes to decrease its total expenses and improve profitability.

Incremental Sales

The additional sales generated from a specific marketing campaign, promotional offer, or product launch, distinguishing these sales from the base level of sales.