Question

The increase in the amount that the government collects in taxes when the economy expands and the decrease in the amount that the government collects in taxes when the economy goes into a recession is an example of:_______

Answer 1

Answer: Automatic stabilizers

Step-by-step explanation:

Automatic stabilizers are referred to as the kind of the fiscal policy that are designed in order to offset a fluctuations in the domestic economic activity via the normal operation without further additional or timely authorization by federal government. These are referred as so because they tend to stabilize the economic and business cycles and thus are further automatically activated without any additional action by the federal government.