An illustration of the term automatic stabilizer is provided byA) The tendency of tax collections to rise as the economy moves into a recession.B) The tendency of tax collections to fall as the economy moves into a recession.C) Increases in tax rates as the economy moves into a recession.D) Decreases in tax rates as the economy moves into a recession.E) Public works designed to get the economy out of a depression.

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Isabelle Wilkins · Accepted Answer

Final Answer : B, Explanation :  Automatic stabilizers are economic policies and programs designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers. The tendency of tax collections to fall as the economy moves into a recession is an example of an automatic stabilizer because it happens automatically as incomes decrease, reducing the tax burden on individuals and businesses, thereby providing them with more disposable income during economic downturns.

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