Which of the Following Statements Best Describes Automatic Stabilizers as They

question 9

Multiple Choice

Which of the following statements best describes automatic stabilizers as they function in Canada?

• A)The size of the spending multiplier varies inversely with the level of GDP.
• B)Personal and corporate income tax collections automatically fall and transfers and subsidies automatically rise as GDP rises.
• C)Personal and corporate income tax collections and transfers and subsidies all automatically vary inversely with the level of GDP.
• D)Personal and corporate income tax collections automatically rise and transfers and subsidies automatically decline as GDP rises.
• E)The size of the spending multiplier varies directly with the level of GDP.

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Definitions:

Think-Aloud Protocols

A research method used to understand cognitive processes, where participants verbalize their thoughts as they perform a task.

Focus Groups

Small groups who come in to talk with a skilled leader about a potential product or process.

Prospective Buyers

Potential customers who have shown interest in purchasing a product or service.

Functional

Describes something that is designed to be practical and useful rather than just attractive.