79.5k views
0 votes
During the recession of 2007−2009, the U.S. federal government’s tax collections fell from about $2.6 trillion down to about $2.1 trillion while GDP declined by about 4 percent. Does the U.S. tax system appear to have built-in stabilizers.

A. Yes
B. No

1 Answer

4 votes

Answer: A. Yes

Explanation: The US tax system has built-in stabilizers which help when the economy is down.

Built-in stabilizers are economy policies of government which are triggered automatically to stabilize the economy when it experiencing a downward movement or an unexpected growth in an excessive way without the explicit intervention of the government. An example of this is unemployment insurance.

User Edixon
by
8.3k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.