An Example of an Automatic Stabilizer Is

question 221

Multiple Choice

An example of an automatic stabilizer is

• A) the progressive tax system.
• B) the decision of the President to cut taxes in a recession.
• C) the Congressional decision to increase unemployment benefits in a recession.
• D) the raising of taxes on cigarettes to discourage smoking to stabilize health-care costs.

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Definitions:

Adjusting Entries

Entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Cost of Goods Sold

Expenses directly connected with making the products a company offers for sale.

FOB Destination

A shipping term indicating that the seller is responsible for the cost and risk of transport until the goods reach the buyer's location.

Buyer's Place

The agreed location where the buyer takes ownership of goods purchased, significant in determining shipping costs and liability.