Which of the Following Would Not Be Considered an Automatic

question 286

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 joblessness 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

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Definitions:

Cumulative Dividends

Dividends that accumulate if not paid in a given year, typically associated with preferred shares, and must be paid out before any dividends are given to common shareholders.

Discontinued Operations

Parts of a company's core business or subsidiaries that have been sold or liquidated.

Consolidated Financial Statements

Financial statements that present the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries as if they were a single financial entity.

Cost Method

An accounting method used to value an investment, based on the purchase price of the asset.