Active Changes in Tax and Spending by Government Intended to Smooth

question 114

Multiple Choice

Active changes in tax and spending by government intended to smooth out the business cycle are called ________,and changes in taxes and spending that occur passively over the business cycle are called ________.

• A)automatic stabilizers; discretionary fiscal policy
• B)discretionary fiscal policy; automatic stabilizers
• C)automatic stabilizers; monetary policy
• D)discretionary fiscal policy; conscious fiscal policy

---

Definitions:

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of stock outstanding on the open market.

Salaries Payable

The amount owed to employees for work performed that has not yet been paid at the end of a reporting period.

Salaries Expense

The total amount of salary payments made to employees, recognized as an expense on the income statement.