The increase in the amount that the government collects in taxes when the economy expands and the decrease in the amount that the government collects in taxes when the economy goes into a recession is an example of
A)automatic stabilizers.
B)discretionary fiscal policy.
C)discretionary monetary policy.
D)automatic monetary policy.
E)progressive taxation.

Question

Quizplus · Accepted Answer

The increase in tax revenue during an expansion and decrease during a recession is an example of automatic stabilizers, which are economic policies that are built into the system and do not require active intervention from the government. In this case, the progressive income tax system serves as an automatic stabilizer.

The Increase in the Amount That the Government Collects in Taxes