Taxes and government expenditures that change in response to changes in the level of economic activity, without need for additional government action, are examples of
A) discretionary fiscal variables.
B) automatic fiscal policy.
C) built-in monetary stabilizers.
D) cyclically balanced budgets.

Question

Quizplus · Accepted Answer

Automatic fiscal policy refers to taxes and government expenditures that automatically adjust based on the level of economic activity, acting as stabilizers for the economy without the need for new legislative action.

Taxes and Government Expenditures That Change in Response to Changes