Built-in stability arises from net tax revenues, which vary directly with the level of GDP. During recession,
Question:
Built-in stability arises from net tax revenues, which vary directly with the level of GDP. During recession, the Federal budget automatically moves toward a stabilizing deficit; during expansion, the budget automatically moves toward an anti-inflationary surplus. Built-in stability lessens, but does not fully correct, undesired changes in real GDP.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Economics Principles Problems And Policies
ISBN: 9780073511443
19th Edition
Authors: Campbell Mcconnell ,Stanley Brue ,Sean Flynn
Question Posted: