As a Result of the Action of Automatic Stabilizers

question 202

Multiple Choice

As a result of the action of automatic stabilizers,

• A)the government budget changes offset changes in national income.
• B)the government has had decreasing budget deficits over time.
• C)taxes and government spending rise when the economy enters a recession.
• D)taxes and government spending fall when the economy enters a recession.

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Definitions:

Periodic Inventory System

An inventory system that updates inventory records at specific intervals, requiring physical counts to determine inventory levels.

Cost Of Goods Sold

Direct expenditures linked to the production of goods sold by a business.

LIFO Basis

A method of inventory valuation where the last items placed into inventory are the first ones taken out for cost of goods sold calculations.

Periodic Inventory System

An inventory accounting method where inventory levels are updated and physical counts are conducted at specific intervals.