Which of the Following Would Not Be Considered an Automatic

question 94

Multiple Choice

Which of the following would not be considered an automatic stabilizer?

• A)legislation increasing funding for job retraining passed during a recession
• B)decreasing unemployment insurance payments due to decreased jobless during an expansion
• C)rising income tax collections due to rising incomes during an expansion
• D)declining food stamp payments due to more persons finding jobs during an expansion

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Definitions:

Volume Based Cost Drivers

Factors that cause the costs of an activity to increase or decrease with changes in the volume of production or services provided.

Labour Intensive

A process or industry that requires a large amount of manual labor relative to capital or machine usage.

Cost Driver

A factor that causes a change in the cost of an activity, directly affecting the cost of production or operations.

Cost Pool

A grouping of individual costs typically by department or service, from which cost allocations are made to products or services.