Due to Automatic Stabilizers, When Income Rises, Government Transfer Spending

question 156

Multiple Choice

Due to automatic stabilizers, when 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:

Mutual Funds

Investment vehicles that pool money from multiple investors to buy a diversified portfolio of stocks, bonds, or other securities.

Jensen's Measure

A performance metric that evaluates the excess return of an investment portfolio over the predicted return by the Capital Asset Pricing Model (CAPM), adjusted for market risk.

Market Portfolio

A hypothetical collection of all market assets, each proportioned by its market value.

Betas

An evaluation measure for the volatility or inherent risk present in a security or portfolio in comparison to the total market.