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The Canadian Tax and Transfer System Acts as an Automatic

Question 115

Multiple Choice

The Canadian tax and transfer system acts as an automatic stabilizer because


A) net tax revenues decrease during economic booms and decrease during economic recessions.
B) net tax revenues increase during economic booms and decrease during economic recessions.
C) tax rates will automatically decrease to stimulate the economy during economic booms.
D) tax rates will automatically increase if the government is running deficits.
E) tax rates will automatically increase to stimulate the economy during economic recessions.

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