If Aggregate Output Decreases, _____

question 120

Multiple Choice

If aggregate output decreases, _____

• A) federal budget deficit decreases.
• B) tax revenue increases.
• C) automatic stabilizers will tend to increase the size of the deficit.
• D) automatic stabilizers will tend to decrease the size of the deficit.
• E) transfer payments decrease as fewer people become eligible for public assistance.

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Definitions:

Promissory Note

A promise in writing, signed by the maker, to pay a sum certain in money to the person named therein, or bearer, at some fixed or determinable future time, or on demand.

Maker

In finance, the maker is the party that creates or issues a promissory note, thereby agreeing to pay a certain amount of money to a payee at a future date.

Bearer

An individual in possession of an instrument, such as a check or bond, that is not made out to a specific payee.

Certified Cheque

A cheque guaranteed by a bank, indicating that the funds are available and have been set aside for the payee.