Automatic Stabilizers "Lean Against the Prevailing Wind" of the Business

question 86

Multiple Choice

Automatic stabilizers "lean against the prevailing wind" of the business cycle because:

• A) wages are controlled by the minimum wage law.
• B) federal expenditures and tax revenues change as the level of real GDP changes.
• C) the spending and tax multipliers are constant.
• D) they include the power of special interests.

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Definitions:

ROI

Return on investment; a measure of the profitability of an investment expressed as a percentage of the initial amount invested.

Profit Goals

Specific financial targets that a company aims to achieve within a certain period, often measured in terms of net income or margin percentages.

Customer Perceptions

The understanding or view that customers have towards a product, service, or business, influenced by marketing, experience, and word-of-mouth.