Refer to the diagram below.Which tax system will generate the largest cyclical deficits?

Name: Refer to the diagram below.Which tax system will generate the largest cyclical deficits?
Brand: Quizplus
Rating: 4.9 (59 reviews)

Question

Quizplus · Accepted Answer

The tax system T₁ will generate the largest cyclical deficits because it has the lowest tax rates and highest spending levels, leading to a larger deficit during economic downturns.

Refer to the Diagram Below