Federal government expenditures or receipts that automatically increase or decrease without requiring action by Congress or the President. Examples are unemployment compensation and corporate and individual income tax.
Measures built into the governments budget that cause its spending to increase and its tax revenues to decrease when the economy goes into slumps, and that cause government expenditures to decrease and taxes to increase when the economy goes into booms.
are changes in taxes and government transfer payments that occur when the level of income changes. They help stabilize the economy. The autonomous expenditure multiplier gives the change in equilibrium output per unit change in autonomous expenditures (e.g., government spending).
Built-in nondiscretionary fiscal measures respond to changes in the business cycle without direct governmental intervention. Spending for unemployment compensation and for welfare rises automatically during downturns without congressional action.
changes in fiscal policy (taxes and government expenditures) that stimulate (or slow) the economy when entering a recession (or boom) and that take place without an active decision by policymakers.
Automatic stabilizers are mechanisms that stabilize real GDP without explicit action by the government.
Taxes and transfer payments that stabilize GDP without requiring policy-makers to take explicit action.
federal expenditures and tax revenues that automatically change in order to stabilize the economy