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charle [14.2K]
3 years ago
15

Which is an example of an automatic stabilizer? As real GDP decreases, income tax revenues: 
A. Increase and transfer payments d

ecrease
B. Decrease and transfer payments increase
C. And transfer payments decrease
D. And transfer payments increase
Business
1 answer:
oee [108]3 years ago
5 0

Answer:

The correct answer is B. Decrease and transfer payments increase.

Explanation:

Automatic stabilizers soften cyclic fluctuations through their effect on aggregate demand. Indeed, when the economy is in a contractive or recessive phase, the negative or very reduced economic growth generates a decrease in fiscal revenues while higher unemployment increases public expenditures. Consequently, private sector disposable income decreases less than GDP does, thus limiting the contractual effect on aggregate demand, growth and employment. Therefore, the budget balance worsens in this phase by stimulating the economy and facilitating economic recovery. In the opposite sense, in times of expansion, automatic stabilizers generate higher public revenues and lower spending, which allows to increase the public surplus - or reduce the deficit - avoiding excessive expansion that could have negative effects on cycle volatility and price stability.

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Big Lots is able to compete against Wal-Mart with a cost leadership strategy because of its strengths in highly disciplined merc
Fofino [41]

Answer:

Big Lots is able to compete against Wal-Mart with a cost leadership strategy because of its strengths in highly disciplined merchandise cost and inventory management system.

Explanation:

fact that support activities in the firm can provide sources of cost reduction

4 0
3 years ago
An examination of the financial statements of a business to ensure that they conform to generally accepted accounting principles
ra1l [238]

Answer:

The correct answer is letter "B": An audit.

Explanation:

An audit is an objective examination of accounting records that makes sure the records are a fair and accurate representation of the transactions they claim to represent. An audit is often used to mean an examination of a taxpayer's records by the Internal Revenue Service (IRS).

4 0
3 years ago
Samantha goes to the grocery store to make her monthly purchase of ginger ale. As she enters the soft drink section, she notices
Vlad1618 [11]

Answer:

SUBSTITUTION BIAS

Explanation:

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.

The substitution bias is a weakness in the Consumer Price Index that overstates inflation because it does not account for the substitution effect, when consumers choose to substitute one good for another after its price becomes cheaper than the good they normally buy.

Samantha decides to buy some peppermint because of the 15% inflation on the price of ginger ale, therefore, this situation is most relevant to SUBSTITUTION BIAS in the construction of CPI.

6 0
3 years ago
Suppose in year 1 the CPI is 90, in year 2 the CPI is 100, and in year 3 the CPI is 110. Then, inflation is
omeli [17]

Answer: E) Both answers B and D are correct.

Explanation:

Inflation using the Consumer Price Index is calculated by;

= (CPI in current year - CPI in previous year) / CPI in previous year

Year 2 Inflation = (100 - 90) / 90

= 11%

Year 3 Inflation = (110 - 100) / 100

= 10%

7 0
3 years ago
What has been the pattern of union membership in recent years?
natima [27]

D. growth of neither public nor private sector unions

Explanation:

In recent years both Public and private unions have lost popularity among the workers as they have been slowly losing their importance in the modern capitalistic societies.

<u>Union memberships were important for the security of the rights of the workers</u> and these unions were often quite influential too. This has not remained the case unfortunately.  

<u>With sanctions in place, unions do not have an effective job to do and their popularity has dwindled. </u>

7 0
3 years ago
Read 2 more answers
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