Taxes and government expenditures that,without need for additional government action,change in response to changes in the level of economic activity are examples of
A) discretionary fiscal variables.
B) automatic fiscal policy.
C) built-in monetary stabilizers.
D) cyclically balanced budgets.

Question

Quizplus · Accepted Answer

Automatic fiscal policy refers to the taxes and government expenditures that automatically adjust in response to changes in the level of economic activity, without the need for additional government action. This helps to stabilize the economy by providing a built-in stabilizer that responds to economic fluctuations without the delays and uncertainties associated with discretionary fiscal policy.

Taxes and Government Expenditures That,without Need for Additional Government Action,change