Automatic Fiscal Policy Occurs

question 259

Multiple Choice

Automatic fiscal policy occurs

• A) because monetary policy is effective.
• B) because tax revenues and transfer payments fluctuate with real GDP.
• C) because government expenditures on goods and services fluctuate with real GDP.
• D) when the Congress makes changes to transfer payment programs.

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Definitions:

Credit Memo

A document issued by a seller to a buyer, reducing the amount the buyer owes to the seller under previous transactions.

Insufficient Funds

Insufficient funds occur when an account does not have enough money available to cover a payment or a withdrawal, leading to a failed transaction.

Remittance Advice

A document sent by a customer to a supplier, notifying the supplier that an invoice has been paid, usually accompanying the payment.

Invoice

The bill that the seller sends to the buyer.