单选题
The corporate income tax is an automatic stabilizer because:
A. corporate profits are strongly counter-cyclical.
B. corporate profits are strongly pro-cyclical.
C. the corporate profits tax increases tax collections during
recessions.
【正确答案】
B
【答案解析】Since corporate profits are strongly pro-cyclical, rising profits during expansionary periods automatically increase tax collections and work to cool off any inflationary pressures.