Solved

A New Member of Congress Notes That " Personal Income

Question 22

Multiple Choice

A new member of Congress notes that " personal income tax collections automatically fall and transfers and subsidies automatically rise as national income declines." This observation best describes how the personal income tax, transfers, and subsidies:


A) serve as built-in stabilizers.
B) produce the cyclically adjusted budget.
C) cause crowding out and reduce equilibrium GDP.
D) contribute to the recognition lag with fiscal policy.

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