If the economy is to have built-in stability, when real GDP falls
A. tax revenues and government transfer payments should fall.
B. tax revenues and government transfer payments should rise.
C. tax revenues should fall and government transfer payments should rise.
D. tax revenues should rise and government transfer payments should fall.
C. tax revenues should fall and government transfer payments should rise.
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Suppose GDP is $10 billion, consumption expenditure is $7 billion, investment is $2 billion, and government expenditure on goods and services is $2 billion. Net exports of goods and services must be
A) $1 billion. B) -$2 billion. C) -$1 billion. D) $2 billion. E) $10 billion.
All of the following are factors that will shift the demand curve except
A) a change in the price of complementary products. B) a change in the price of substitute products. C) a change in income. D) a change in the price of inputs.
Which of the following does not describe governmental policy actions that are helpful in supporting growth in an economy? Governmental policies that
A) provide secure rights to private property. B) establish an independent court system that enforces contracts. C) facilitate the development of an efficient financial system. D) avoid playing any role in developing communication systems.
The chief cause of short-run changes in exchange rates is
a. the world's political situation. b. "hot money" chasing high interest rates. c. changes in consumer tastes. d. central bank interventions.