automatic stabilizers

automatic stabilizers definition - business

automatic stabilizers

Government spending and taxation that automatically change to reduce variations in economic activity. For example, an increase in economic activity will result in individuals and businesses paying more taxes. These increased tax payments will leave consumers and businesses with less money to spend. Declining economic activity will be accompanied by increased unemployment benefits.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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