4. Rules governing taxeswith the exception of lump-sum taxesand some transfers act as automatic stabilizers, reducing the
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4. Rules governing taxes—with the exception of lump-sum taxes—and some transfers act as automatic stabilizers, reducing the size of the multiplier and automatically reducing the size of fluctuations in the business cycle. In contrast, discretionary fiscal policy arises from deliberate actions by policy makers rather than from the business cycle.
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Essentials Of Economics
ISBN: 9781429218290
2nd Edition
Authors: Paul Krugman, Robin Wells, Kathryn Graddy
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