Asked by David Torrez on May 20, 2024
Verified
As the economy contracts,tax revenues ________ and transfer payments _________.
A) fall;rise
B) fall;fall
C) rise;fall
D) rise;rise
Transfer Payments
Financial distributions without the requirement of goods or services in return, such as welfare or social security.
Tax Revenues
Governments' income derived from tax levies.
- Understand the impact of economic fluctuations on government tax revenues and transfer payments.
Verified Answer
ME
MUNOZ ESCARCEGA BRANDONMay 22, 2024
Final Answer :
A
Explanation :
As the economy contracts, tax revenues fall because individuals and businesses earn less money and thus pay less in taxes. Transfer payments, such as unemployment benefits and welfare, rise because more people are in need of financial assistance.
Learning Objectives
- Understand the impact of economic fluctuations on government tax revenues and transfer payments.