An Example of Automatic Fiscal Policy Is When

question 140

Multiple Choice

An example of automatic fiscal policy is when

• A) tax revenues decrease as real GDP decreases.
• B) Congress passes a law that raises tax rates.
• C) Congress decides to cut government expenditure.
• D) the president drafts a bill to reduce defense spending.

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Definitions:

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An association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.

Demand Curve

A visual illustration that shows how the amount of a product consumers want to buy varies with changes in its price.

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A strategy that yields the best payoff for a player, regardless of what strategies other players use.