A fiscal action that is triggered by the state of the economy is called
A) monetarist policy.
B) the tax wedge.
C) the multiplier.
D) automatic fiscal policy.

Question

Quizplus · Accepted Answer

Automatic fiscal policy refers to government spending or taxation changes that are automatically triggered based on the state of the economy, without the need for specific legislation or policy decisions. This can include things like unemployment benefits increasing during a recession or taxes automatically decreasing when the economy is in a slump.

A Fiscal Action That Is Triggered by the State of the Economy