Income and revenue from taxes have a specific relationship during recessions. What is it?
A) incomes rise, tax revenue decreases
B) incomes rise, tax revenue increases
C) incomes fall, tax revenue increases
D) incomes fall, tax revenue decreases

Question

Quizplus · Accepted Answer

During recessions, people generally earn less income due to job losses, reduced hours, or wage cuts, which leads to a decrease in their taxable income. As a result, tax revenue also decreases because people have less income to be taxed on.

Income and Revenue from Taxes Have a Specific Relationship During