When Government Tax Revenues Change Automatically and in a Countercyclical

question 171

Multiple Choice

When government tax revenues change automatically and in a countercyclical direction over the course of the business cycle, this is an example of:

• A)impounding.
• B)built-in stability.
• C)money creation.
• D)the full-employment budget.

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Definitions:

After-tax Income

The amount of income left after all federal, state, and withholding taxes have been deducted.

Tax Rate

The rate at which taxes are levied on the income of a person or company.

FIFO

"First-In, First-Out," an inventory valuation method assuming goods are sold in the order they are acquired, affecting the cost of goods sold and ending inventory.

Average-cost Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.