The government decides to pursue a policy of keeping the amount of tax revenue it collects to be a fixed amount. In terms of tax rates, is this policy pro-cyclical, countercyclical, or neutral? Is this a good policy for the government to adopt?
The government decides to pursue a policy of keeping the amount of tax revenue it collects to be a fixed amount. In terms of tax rates, is this policy pro-cyclical, countercyclical, or neutral? Is this a good policy for the government to adopt?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please using examples and clearly labeled graphs where applicable answer the following question clearly and detailed.
The government decides to pursue a policy of keeping the amount of tax revenue it collects to be a fixed amount. In terms of tax rates, is this policy pro-cyclical, countercyclical, or neutral? Is this a good policy for the government to adopt?
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