automatic stabilisers of fiscal policy

Question 1

automatic stabilisers

Answer 1

-fiscal policy tools to influence GDP and counter fluctuations In Econ cycle

Question 2

automatic stabilisers in boom and recession

Answer 2

-progressive income tax: boom- workers pushed into higher brackets increase a.r.t. recession: pushed down into lower brackets

-unemployment benefits: unemployment low, gov spending falls, unemployment high, gov spending increases

Question 3

multiplier effect

Answer 3

when an initial injection leads to a more extensive change in output than the change it initially brought about