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 ▸Assuming an increase in the market demand for petrol, analyse the role of the price mechanism in reallocating resources.
What's the difference between a 10-marker and a 15-marker and how would I go about answering these?
Show how an decrease in income tax will close a deflationary gap
What are the ways to combat high inflation?