A major advantage of the built-in or automatic stabilizers is that they require no legislative action by Congress to be made effective.
<h3>What are automatic stablizers?</h3>
Automatic stabilizers are stabilizers that adjust the economy automatically without the intervention of the congress. An example of an automatic stablizer is taxes.
In an expansion, progressive tax increases the tax paid by citizens and in a contraction, tax paid is reduced and this increases disposable income.
Here is the complete question:
A major advantage of the built-in or automatic stabilizers is that they:
(a) simultaneously stabilize the economy and reduce the absolute size of the public debt.
(b) automatically produce surpluses during recessions and deficits during inflation.
(c) require no legislative action by Congress to be made effective.
(d) guarantee that the federal budget will be balanced over the course of the business cycle.
To maintain the same standard of living, the average family must spend more money.
She should sell one of the stocks that she's held for over two years because long term gains receive preferential tax treatment
For the point of taxation, short term capital gains are treated as ordinary income , where as long term capital gains have preferential tax rates of 0%,15% or 20%, which depends upon the income level. Also effective tax rates on the long term capital gain is lesser than the short term capital gain.
With the top incomes paying about half the taxes on capital income as earned income, this preferential rate is one of the most expensive in the tax law and is regarded as a tax expenditure.
A capital gain is profit from the sale of an asset, like a business, stock, piece of art, or parcel of land.
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<span>While the role of the state in a command economy is to be Dominant, in a market economy the state's role is to be Passive
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