What are automatic stabilisers?

They are changes in taxation and spending that happen automatically as the economy moves through different phases of the busines cycle. For example the tax revenues increase as the economy expands and transfer payments, such as employment benefits, would decrease. 

NH

Related Economics IB answers

All answers ▸

What are the non-price determinants of demand?


How should I structure IB Economics Paper 1 style questions?


Do I have to be good at Maths to achieve good results in IB Economics?


Evaluate the effects of a price ceiling on the housing market