Taxes and transfer payments that stabilize GDP without requiring explicit actions by policymakers are called automatic stabilizers. Both government spending and tax revenues are very sensitive to the state of the economy. Because tax collections are based largely on individual and corporate income, tax revenues will fall sharply during a recession as national income falls.
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- Publication Date
- May 29, 2013
- Language
- English
- Category
- Education & Language
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- By (author): Homework Help Classof1
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