A Fall in Income That Results in a Decrease in Tax

question 37

Multiple Choice

A fall in income that results in a decrease in tax revenues is an example of ________.

• A) automatic fiscal policy
• B) needs-tested tax programs
• C) a recession
• D) discretionary fiscal policy

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Definitions:

Domestic Demand

The total demand for goods and services within a country, including both consumer spending and business investment.

Wage Gap

The difference in average earnings between two or more groups, often highlighting disparities between genders, races, or other demographic segments.

Human Capital

The aggregate of talents, understanding, and immaterial resources possessed by individuals that are capable of producing economic benefits.

Earnings Gap

The difference in average earnings between two distinct groups, typically referring to disparities based on gender, race, or education level.