Personal income tax and government outlays act as automatic stabilisers.

Name: Personal income tax and government outlays act as automatic stabilisers.
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Question

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Personal income tax and government outlays (such as unemployment benefits) are designed to increase during economic downturns and decrease during economic upswing. This helps to stabilize the economy by providing income support during recessions and reducing spending during booms, thus mitigating the fluctuations in economic activity.

Personal Income Tax and Government Outlays Act as Automatic Stabilisers