Question

_____ are revenue and spending items in the federal budget that change with the ups and downs in an economy so as to stabilize disposable income, consumption, and real GDP.

Answer 1

Answer:

Automatic stabilizers

Explanation:

Examples of automatic stabilizers are income tax and government welfare spending. They adjust immediately to minimise the effect of fluctuations in the economy.

For example in a recession, income tax reduces and government welfare spending increases. In a boom, income tax increases and government welfare spending falls.

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