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  • 18-03-2021
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How is taxation used to stabilize the economy?

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samanthawestfall69
samanthawestfall69 samanthawestfall69
  • 18-03-2021

Answer:

Certain government expenditure and taxation policies tend to insulate individuals from the impact of shocks to the economy. As incomes fall, people pay less in income taxes. Any government program that tends to reduce fluctuations in GDP automatically is called an automatic stabilizer.

Explanation:

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