Income taxes in the United States are part of automatic fiscal policy because
A) tax rates can be adjusted by the Congress to counteract economic fluctuations.
B) the President can increase tax rates whenever the President deems such a policy appropriate.
C) tax revenues decrease when income increases, intensifying the increase in aggregate demand.
D) tax revenues increase when income increases, thus offsetting some of the increase in aggregate demand.
Correct Answer:
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A)
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B)
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