The increase in the amount that the government collects in taxes when the economy expands and the decrease in the amount that the government collects in taxes when the economy goes into a recession is an example of
A)automatic stabilizers.
B)discretionary fiscal policy.
C)discretionary monetary policy.
D)automatic monetary policy.

Question

Quizplus · Accepted Answer

The increase in tax revenue during economic expansion and the decrease in tax revenue during an economic recession are examples of automatic stabilizers because they help to stabilize the economy without any deliberate action from policymakers.

The Increase in the Amount That the Government Collects in Taxes