Automatic Stabilisers

• automatic stabilizers are


  economic policies and programs designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers on an individual basis
• best known automatic stabilizer are

  corporate and personal taxes and transfer systems (unemployment insurance and welfare)
• Automatic stabilizers are so called because


  they act to stabilize economic cycles and are automatically triggered without explicit government action
• automatic stabilizers ca include the use of


  a progressive taxation structure, the shares of taxes if national income falls when the economy is booming and rises when the economy is Ina slump
• the purpose of an economic stabilizer is to

  prevent the negative consequences relating to unexpectedly high growth rates or recessions
• the use of an automatic stabilizer is triggered by


  a particular event within an economy and is applied to an entire region, based on specific qualifications
• when an economy Is in recession


  automatic stabilizers may result in higher budget deficits
• higher budget deficits can be due to


  the higher level of benefit payouts being used to support individuals or businesses in the economy, as well as the fall in the total amount of revenue being received