The automatic working of the government's tax system (and, to a lesser extent, its social welfare programs) functions
A) as an automatic destabilizer.
B) as an automatic stabilizer.
C) as an automatic change in the money supply.
D) as an automatic change in private saving.

Question

Quizplus · Accepted Answer

The government's tax system and social welfare programs act as automatic stabilizers. They help to moderate the fluctuations in a country's economic cycle by automatically increasing spending or decreasing taxes when the economy slows down, and vice versa, without the need for new legislation.

The Automatic Working of the Government's Tax System (And, to a Lesser