Explain how built in or automatic stabilizers work

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Fundamentals of Financial Management
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Chapter 12 / Exercise 12-11
Fundamentals of Financial Management
Brigham
Expert Verified
3) Explain how built-in (or automatic) stabilizers work. What are the differences between proportional, progressive, and regressive tax systems as they relate to an economy’s built-in stability?
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Fundamentals of Financial Management
The document you are viewing contains questions related to this textbook.
Chapter 12 / Exercise 12-11
Fundamentals of Financial Management
Brigham
Expert Verified
4) Briefly state and evaluate the problem of time lags in enacting and applying fiscal policy. How might “politics” complicate fiscal policy? How might expectations of a near-term policy reversal weaken fiscal policy based on changes in tax rates? What is the crowdingout effect and why might it be relevant to fiscal policy?

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