During an expansion, tax revenues ________, while during a recession, tax revenues ________.
A) decrease; increase
B) increase; decrease
C) remain stable; decrease
D) fail to cover expenditures; fail to match transfer payments

Question

Quizplus · Accepted Answer

During an expansion, economic activity and incomes rise, leading to higher tax revenues. Conversely, during a recession, economic activity and incomes fall, resulting in lower tax revenues.

During an Expansion, Tax Revenues ________, While During a Recession