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Taxes, the Multiplier Effect, and Automatic Stabilizers
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Taxes, the Multiplier Effect, and Automatic Stabilizers
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20. Fiscal Policy / Taxes, the Multiplier Effect, and Automatic Stabilizers / Problem 5
Problem 5
On a graph showing GDP and taxes, how would automatic stabilizers appear during an economic boom?
A
Taxes would increase as GDP increases, showing an upward slope.
B
Taxes would decrease as GDP increases, showing a downward slope.
C
Taxes would remain constant regardless of GDP changes.
D
Taxes would decrease as GDP decreases, showing an upward slope.
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