Which of the Following Is an Example of an Automatic

question 30

Multiple Choice

Which of the following is an example of an automatic stabilizer?

• A) cost of living adjustments to Social Security payments
• B) unemployment benefits
• C) a temporary tax rebate
• D) all of the above

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Definitions:

Equity Recognition

The process in accounting of recognizing increases in ownership interests.

Share Capital

The funds raised by a company through the issuance of shares, representing the ownership interest invested by shareholders.

Acquisition

The process by which a company purchases most or all of another firm's shares or assets to gain control or ownership of that company.

Investment Account

An account held at a financial institution that is used for the purpose of investing in securities such as stocks, bonds, mutual funds, and other investment vehicles.