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the fact that tax receipts fall during a recession: group of answer choices reduces the adverse effect of the initial fall in aggregate demand. acts as an automatic contractionary fiscal policy. makes the multiplier stronger. has no impact on the multiplier.
the fact that tax receipts fall during a recession: group of answer choices reduces the adverse effect of the initial fall in aggregate demand. acts as an automatic contractionary fiscal policy. makes the multiplier stronger. has no impact on the multiplier.
The fact thattax receiptsfall during a recession ''acts as an automatic contractionary fiscal policy.''During arecession, tax receipts tend to fall as a result of lower economic activity and lower profits, which leads to lower tax revenues for governments. This reduction in tax receipts can act as an automaticcontractionaryfiscal policy, as it reduces the amount of government spending that can be supported without increasing the budget deficit.In other words, the reduction in tax receipts helps to offset the initial fall in aggregate demand by reducing the amount of government spending that is available. This can help to prevent a further increase in the budget deficit and the national debt.In conclusion, the correct answer is: acts as an automatic contractionary fiscal policy.See more abouttax receiptsatbrainly.com/question/28015553.#SPJ11...