Fiscal policies that move the economy toward potential GDP without a change in policy are called

Question

Quizplus · Accepted Answer

Automatic stabilizers are fiscal policies that are built into existing governmental programs and tax structures that automatically stabilize economic activity over the business cycle. They do this by increasing spending or reducing taxes when the economy is in recession and decreasing spending or increasing taxes when the economy is in expansion. These stabilizers work automatically without the need for policy changes.

Fiscal Policies That Move the Economy Toward Potential GDP Without