Income Taxes Are an Automatic Stabilizer Because When Income Falls,ceteris

question 45

Multiple Choice

Income taxes are an automatic stabilizer because when income falls,ceteris paribus,tax receipts

• A)Fall as taxpayers experience bracket creep.
• B)Fall because income taxes are regressive.
• C)Rise because automatic stabilizers work against the cyclical movements of the GDP.
• D)Fall because taxes are computed on the basis of income.

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