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.

---

Definitions:

Fundamental Attribution Error

A bias towards attributing others' actions more to their personal qualities than to the context they are in.

Dispositional Factors

Personality attributes or traits that influence an individual's behavior or attitudes in various situations.

Situational Constraints

External factors that limit or influence an individual's ability to perform or behave in a certain way.

Divided Nation

A term used to describe a country that is split due to significant differences in opinions, beliefs, or values among its population.