Income taxes are an example of:
A) an automatic stabilizer.
B) discretionary fiscal policy.
C) expansionary fiscal policy.
D) contractionary fiscal policy.

Question

Quizplus · Accepted Answer

Income taxes act as an automatic stabilizer by decreasing during economic downturns and increasing during economic expansions. This creates a natural counterbalance to changes in the economy without the need for discretionary fiscal policy.

Income Taxes Are an Example Of