Which of the following serves as an automatic stabilizer in the economy?
A) Interest rates
B) Exchange rates
C) The inflation rate
D) The progressive income tax

Question

Quizplus · Accepted Answer

The progressive income tax serves as an automatic stabilizer in the economy by collecting more tax revenue during periods of economic expansion and less during periods of contraction. This helps to stabilize aggregate demand and output levels in the economy.

Which of the Following Serves as an Automatic Stabilizer in the Economy