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Mariana [72]
3 years ago
13

During the recession of 2007−2009, the u.s. federal government's tax collections fell from about $2.6 trillion down to about $2.

1 trillion while gdp declined by about 4 percent. does the u.s. tax system appear to have built-in stabilizers?
Business
1 answer:
STALIN [3.7K]3 years ago
6 0
Yes. The U.S. tax system has a built-in stabilizers.

These built-in stabilizers are called automatic stabilizers. Automatic stabilizers are defined as the features of tax and transfer system that lends stability of the economy without direct intervention from the policy makers.

These stabilizers tempers the economy when it overheats and provides economic stimulus when it slumps. 

When:                           Automatic Stabilizers:
Incomes are high          <span>tax liabilities rise and eligibility for government benefits falls
Incomes are low            </span><span>tax liabilities drop and more families become eligible for government                                         transfer programs (food stamps, unemployment insurance)</span>
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Answer:

1. Break even points in units will be =  2,700 units

2. Break-even point in dollar sales = $56,700

3. In case fixed expense increase by $600 then Break even point in unit sales = 2,900 units

Explanation:

Break even point = \frac{Fixed Cost}{Contribution per unit}

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Final Answer

1. Break even points in units will be =  2,700 units

2. Break-even point in dollar sales = $56,700

3. In case fixed expense increase by $600 then Break even point in unit sales = 2,900 units

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