For complementary goods, an increase in the price of one shifts the demand curve for the other to the right

If households come to believe that permanent income has not changed ________

A) the impact of a change in taxes on spending will be limited B) they will consume on the basis of their current income C) their life-cycle will be affected D) the impact of a given change in taxes on spending will be enhanced

Personal and corporate income taxes are automatic stabilizers because

a. they generate approximately the same revenues during prosperity and recession b. tax rates decrease more during prosperity than during recession c. tax rates increase more during prosperity than during recession d. they take more income out of the economy during prosperity than during recession e. they take less income out of the economy during prosperity than during recession