Automatic stabilizers act to moderate business cycles primarily through the personal income and consumption channels.

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Automatic stabilizers are government policies or programs that are designed to automatically stabilize the economy during economic downturns or recessions. They work by increasing government spending or decreasing taxes when economic activity is low, and decreasing spending or increasing taxes when economic activity is high. These policies operate primarily through the personal income and consumption channels, as increased government spending or tax cuts directly increase consumers' disposable income, which in turn leads to increased consumption and economic growth. Similarly, decreased government spending or tax increases reduce disposable income and consumption, which can help to slow down an overheating economy.

Automatic Stabilizers Act to Moderate Business Cycles Primarily Through the Personal