As a Result of the Existence of Automatic Stabilizers

question 279

Multiple Choice

As a result of the existence of automatic stabilizers

• A)the government budget deficit will always increase during a period of economic recession.
• B)the economy will always tend to move toward a full-employment equilibrium.
• C)the government budget deficit will always increase during a period of economic expansion.
• D)the business cycle will no longer exist.
• E)None of the choices are correct.

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Definitions:

Financial Statement

Documents that report on a company's financial performance and health, including the balance sheet, income statement, and cash flow statement.

Normal Balance

is the side of an account on which increases to the account are recorded, typically either a debit for assets and expenses or a credit for liabilities, equity, and revenues.

Account Category

A way of classifying accounts in accounting records, such as assets, liabilities, equity, revenues, and expenses.

Financial Statement

An official document detailing the financial transactions and standing of an entity such as a company, individual, or organization, commonly encompassing a balance sheet, income statement, and statement of cash flows.