Changes in taxes,transfer payments,or government expenditures that naturally occur with the business cycle are known as
A) expansionary fiscal policy.
B) contractionary fiscal policy.
C) discretionary fiscal policy.
D) automatic stabilizers.

Question

Quizplus · Accepted Answer

Changes in taxes, transfer payments, or government expenditures that occur automatically with the business cycle are known as automatic stabilizers. These stabilizers help to reduce the amplitude of fluctuations in the economy by dampening the effects of economic shocks without requiring government intervention, which is why they are called automatic.

Changes in Taxes,transfer Payments,or Government Expenditures That Naturally Occur with the Business