Automatic Stabilisers Decrease the Impact of a Recession on the Level

question 82

Multiple Choice

Automatic stabilisers decrease the impact of a recession on the level of economic activity because they

• A)mean disposable income does not change by as much as real GDP.
• B)reduce the interest rate and so allow firms to increase their level of investment.
• C)increase the quantity of money in circulation.
• D)raise the exchange rate so Australian exports become more attractive to foreigners.
• E)increase taxes so the budget is always balanced.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Cash Sales

are transactions where payment is made in cash immediately upon the sale of goods or services.

NCI

Non-Controlling Interest; a minority stake in a subsidiary that is not owned or controlled by the parent corporation.

Ownership Interest

The right or stake that an individual or entity has in an asset, often implying a share of the asset's profits or losses.