Automatic changes in tax revenues and expenditures that occur as a result of fluctuations in real GDP are referred to as automatic
A)taxes and expenditure.
B)discretionary taxes and expenditure.
C)government.
D)stabilizers.
E)discretionary policy.

Question

Quizplus · Accepted Answer

Automatic stabilizers refer to changes in tax revenues and expenditures that occur as a result of fluctuations in real GDP. They function automatically and do not require any specific legislative action. Examples of automatic stabilizers include unemployment insurance, progressive income tax, and programs like Medicaid and food stamps. These stabilizers help to soften the impact of economic fluctuations on individuals and reduce the severity of economic cycles.

Automatic Changes in Tax Revenues and Expenditures That Occur as a Result