Which of the following is an example of an automatic stabilizer?O Congress legislates lower tax rates to increase consumption and investment.O Tax rates are increased during a recession to maintain a balanced budget.O A regressive income tax system reduces tax revenues (as a share of income) as income expands.O Revenues from the income tax increase sharply during a business boom but decline substantially during arecession, even though no new tax legislation has been enacted.

Automatic stabilizer are such policy tools that automatically adjust as per the need and situation…

Which of the following is an example of an automatic stabilizer? Congress legislates lower tax rates to increase consumption and investment. Tax rates are increased during a recession to maintain a balanced budget. A regressive income tax system reduces tax revenues (as a share of income) as income expands. O Revenues from the income tax increase sharply during a business boom but decline substantially during a recession, even though no new tax legislation has been enacted.

Which of the following is an example of an automatic stabilizer? Congress legislates lower tax rates to increase consumption and investment. Tax rates are increased during a recession to maintain a balanced budget. A regressive income tax system reduces tax revenues (as a share of income) as income expands. O Revenues from the income tax increase sharply during a business boom but decline substantially during a recession, even though no new tax legislation has been enacted.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 1SQ

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Question

Which of the following is an example of an automatic stabilizer?
O Congress legislates lower tax rates to increase consumption and investment.
O Tax rates are increased during a recession to maintain a balanced budget.
O A regressive income tax system reduces tax revenues (as a share of income) as income expands.
O Revenues from the income tax increase sharply during a business boom but decline substantially during a
recession, even though no new tax legislation has been enacted.

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