A fall in income that results in a decrease in tax revenues is an example of

Question

Quizplus · Accepted Answer

Automatic fiscal policies are mechanisms built into the government budget that automatically increase or decrease net spending (or the budget balance) in response to economic changes without the need for explicit action by policymakers. A fall in income leading to decreased tax revenues is an example of this, as tax collections naturally decline when incomes fall, without any new legislative action required.

A Fall in Income That Results in a Decrease in Tax