Solved

Transfer Payments Made by Governments Over the Business Cycle in the United

Question 6

Multiple Choice

Transfer payments made by governments over the business cycle in the United States


A) move procyclically with GDP because they are constructed to increase or decrease automatically as tax receipts climb or fall with GDP.
B) move countercyclically with GDP because they are constructed to increase or decrease automatically as changes in GDP cause corresponding changes in the number of people eligible for payment.
C) are not well correlated with changes in GDP in part because the discretionary power to enact changes in fiscal policy is diluted across too many congressional committees.
D) vary directly with tax revenues and therefore play no role in stabilization policy.
E) none of the above.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents