The Increase in the Amount That the Government Collects in Taxes

question 156

Multiple Choice

The increase in the amount that the government collects in taxes when the economy expands and the decrease in the amount that the government collects in taxes when the economy goes into a recession is an example of

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

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Definitions:

Accounting Period

A specific period of time used for financial reporting and analysis, often a quarter or a year.

Estimates

Approximations used in accounting when precise data is unavailable, often used for calculating allowances for doubtful accounts or depreciation.

Actual Overhead Cost

The real expenses incurred for overhead, including costs associated with running the business that are not directly tied to a specific product or service.

Overhead Applied

The process of assigning a portion of fixed and variable overhead costs to individual units of production.