Automatic stabilizers are government programs that tend to push the federal budget toward surplus as the real GDP rises and toward deficit as the real GDP falls.

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Automatic stabilizers, such as unemployment insurance and progressive income taxes, are designed to decrease government spending and increase tax revenues during times of economic growth, leading to a surplus. They also increase government spending and decrease tax revenues during times of economic downturn, leading to a deficit.

Automatic Stabilizers Are Government Programs That Tend to Push the Federal