Which of the following is false A Tax revenues move in the s

Which of the following is false?

		A. Tax revenues move in the same direction as the business cycle.
		B. Expenditures on transfer payments move in the opposite direction of the business cycle.
		C. The federal budget deficit works as a sort of automatic economic stabilizer.
		D. The selling of government bonds to pay for a deficit increases private investment spending

Which of the following is false?

		A. Tax revenues move in the same direction as the business cycle.
		B. Expenditures on transfer payments move in the opposite direction of the business cycle.
		C. The federal budget deficit works as a sort of automatic economic stabilizer.
		D. The selling of government bonds to pay for a deficit increases private investment spending

A.True.

During expansion a government increases the tax rate and output also rises during expansion, so tax revenue rises and vice versa.

B.During expansion expenditure on transfer payment falls and during recession expenditure on transfer payment rises.

Answer-True.

C.False.

Discretionary fiscal policy doesn\'t require government\'s action but government\'s action is involved in budget deficit.

D.Selling of government bind to pay for deficit reduces government\'s expenditure and shifts IS curve to left reducing the interest rate.Private investment rises with fall in interest rate.

Answer-True.

Which of the following is false? A. Tax revenues move in the same direction as the business cycle. B. Expenditures on transfer payments move in the opposite di

Which of the following is false A Tax revenues move in the s

Solution

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