Unformatted text preview: policy. 2. Which of the following is NOT an automatic stabilizer? a. A progressive income tax. That is; tax collections will increase when GDP does. b. Unemployment compensation. That is, unemployment compensation payments will increase when GDP and employment decrease. c. Property taxes. They are not an automatic stabilizer, because there is no reason for them to change when GDP does – they depend on property values. d. Sales and excise taxes. They are; when GDP increases, consumption expenditure increases, so sales and excise tax collections increase....
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- Spring '05
- Progressive Tax, automatic stabilizer