Which of the following is an example of an automatic stabilizer?
What will be an ideal response?
Revenues from the corporate income tax increase sharply during a business boom but decline substantially during a recession, even though no new tax legislation has been enacted.
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An increase in the effective corporate tax rate due to increased inflation results in
a. a upward shift of the investment schedule. b. a downward shift of the investment schedule. c. no shift of the investment schedule. d. a rightward shift of the saving schedule.
What can explain the fact that DVD players decreased in price during the 1990s even as more DVD players were being sold?
A) The demand for DVDs was declining. B) The supply of DVD players was decreasing. C) The supply of DVD players was increasing more than the demand for DVD players. D) The demand for DVD players was increasing more than the supply of DVD players.