Income tax collections:
a. rise during a recession, thus reduce the severity of the recession.
b. rise during a recession, thus increase the severity of the recession.
c. fall during inflationary episodes, thus increase the severity of the inflation.
d. fall during a recession, thus reducing the severity of the recession.
d
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An externality can be a
A) cost or a benefit. B) benefit but not a cost. C) cost but not a benefit. D) marginal cost but not a total cost.
When the price of a good changes, the income effect can be found by comparing the equilibrium quantities purchased
A) on the old budget line and the new budget line. B) on the original indifference curve when faced with the original prices and when faced with the new prices. C) on the new budget line and a hypothetical budget line that is a shift back to the original indifference curve parallel to the new budget line. D) on the new indifference curve.