Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

At what point will taxes be most effective at reducing cyclical fluctuations in national output?

  • Awhen the tax yield is independent of national income
  • Bwhen the tax yield varies inversely with national income
  • Cwhen the tax yield varies less than proportionately with national income
  • Dwhen the tax yield varies more than proportionately with national income

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