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

---

Definitions:

Capacity

The maximum level of output that a company can sustain to produce within a specified period under normal conditions.

Operating Cash Flows

The amount of cash generated by a company's normal business operations over a specific period.

Credit Analysis

The evaluation of an individual's or organization's ability to repay debt.

Probability of Default

An estimate of the likelihood that a borrower will be unable to meet debt obligations as specified in the terms of the loan, typically expressed as a percentage.