An 'Automatic Stabiliser' Is

question 104

Multiple Choice

An 'automatic stabiliser' is:

• A)a policy for growth of an economy where the current account of the balance of payments is kept in balance.
• B)a monetary or fiscal policy that aims to smooth out the business cycle.
• C)the tendency for inflation to fall as unemployment rises.
• D)a tax or form of government expenditure that has the effect of reducing the size of business cycle fluctuations.

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Definitions:

Preferred Stock

A class of ownership in a corporation with a specified dividend that must be paid before dividends to common stockholders.

Shares

Shares represent units of ownership interest in a corporation or financial asset, allowing shareholders to potentially participate in the profits and decision-making of the company.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the owners' claims on the company.

Capital Stock

Represents the original investment in a company by its owners or shareholders, indicated through the issuance of shares.