During Recessions, How Do Automatic Stabilizers Tend to Make the Government's

question 13

Multiple Choice

During recessions, how do automatic stabilizers tend to make the government's budget move?

• A)They make the budget move toward deficit.
• B)They make the budget move toward surplus.
• C)They make the budget move toward balance.
• D)They do not necessarily move the budget in any particular direction.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or a business cycle, whichever is longer.

Long-Term Liabilities

Obligations or debts a company is responsible for paying beyond one year from the date of the balance sheet.

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within a year or within the operating cycle of the business, whichever is longer.

Current Liability

A company's debts or obligations that are due within one year, appearing on the company's balance sheet and including short-term borrowing, accounts payable, and other liabilities.