Which of the following is one of the most important automatic stabilizers?

Question

Quizplus · Accepted Answer

The tax system is one of the most important automatic stabilizers, as it adjusts automatically as the economy changes. For example, during an economic downturn, tax revenues typically fall due to decreased economic activity and increased unemployment. This leads to an increase in government spending on welfare programs, which helps to offset the downturn. Similarly, during an economic expansion, tax revenues typically increase due to increased economic activity and employment, which helps to slow down the pace of the expansion.

Which of the Following Is One of the Most Important