Automatic Fiscal Policy Is at Work If, as Real GDP

question 4

Multiple Choice

Automatic fiscal policy is at work if, as real GDP increases,

• A) transfer payments decrease and interest rates decrease.
• B) transfer payments increase and tax revenues decrease.
• C) tax revenues increase and transfer payments decrease.
• D) tax revenues decrease and interest rates increase.

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Definitions:

Aggregations

Collections or clusters of items, individuals, or particles that come together but are not strictly bound to each other.

Society

A group of individuals belonging to the same species and often closely related; an organized society is an actively cooperating group.

Behavioral Responses

Actions or reactions of an organism in response to external or internal stimuli.

Lek

A small territory in which males compete for females.