Taxes and transfer payments that stabilize GDP without requiring policymakers to take explicit actions are known as _______.

Question

Quizplus · Accepted Answer

Taxes and transfer payments are both examples of automatic stabilizers, which work to stabilize GDP without policymakers needing to take explicit actions. Full-employment budgets are a concept that aims to ensure full employment through the budget, while cyclical deficits are deficits that occur due to changes in economic cycles. Fiscal drags are policies that slow down economic growth. Therefore, only option B is the correct choice as it is the only one that accurately describes the question.

Taxes and Transfer Payments That Stabilize GDP Without Requiring Policymakers