Due to Automatic Stabilizers, When the Nation's Total Income Rises

question 10

Multiple Choice

Due to automatic stabilizers, when the nation's total income rises, government transfer spending:

• A) Increases and tax revenues decrease
• B) Decreases and tax revenues increase
• C) And tax revenues decrease
• D) And tax revenues increase

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Definitions:

Purchases

Items bought or acquired by a company for various purposes, primarily for resale in the course of business.

Cost Of Goods Available

The total cost of inventory available for sale during a period, calculated as beginning inventory plus purchases minus ending inventory.

Periodic Inventory System

An accounting method where inventory is physically counted at specific intervals to determine the level of inventory and cost of goods sold.

Perpetual Inventory System

An inventory accounting system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.