All of the Following,except One,are Examples of Automatic Stabilizers

question 130

Multiple Choice

All of the following,except one,are examples of automatic stabilizers.Which is the exception?

• A)Progressive income taxes.
• B)Expenditures on education which automatically rise when the number of school-aged children increases.
• C)Welfare payments which increase when the economy suffers a recession.
• D)Employment insurance which decreases when the economy is doing well.

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Definitions:

Operating Income

Income generated from a company's regular business operations, excluding one-time events and expenses.

Variable Cost

Costs that change in proportion to the level of activity or volume of goods produced.

Fixed Costs

Costs that do not change with the volume of production, such as rent, salaries, or insurance.

Contribution Margin

The difference between sales revenue and variable costs of a product or service, used to cover fixed costs and to generate profit.