Decreasing taxes during a recession is an example of
A) an automatic destabilizer.
B) an automatic stabilizer.
C) discretionary economic policy.
D) policy lags.

Question

Quizplus · Accepted Answer

Automatic stabilizers are policies or programs built into the economic system that help stabilize the economy during economic fluctuations without any additional actions from policymakers. Decreasing taxes during a recession is an example of an automatic stabilizer as it helps to increase disposable income and consumer spending, which can help stimulate the economy.

Decreasing Taxes During a Recession Is an Example of