ap macro
💸 Unit 1: Basic Economic Concepts
📈 Unit 2: Economic Indicators and the Business Cycle
💲 Unit 3: National Income and Price Determination
💰 Unit 4: Financial Sector
⚖️ Unit 5: Long-Run Consequences of Stabilization Policies
🏗 Unit 6: Open Economy-International Trade and Finance
3.9 Automatic Stabilizers
#automatic-stabilizers
#taxes
#welfare
#unemployment
#recession
⏱️ 1 min read
written by
jeanne stansak
November 15, 2020
3.9: Automatic Stabilizers
Automatic stabilizers are a type of fiscal policy that is already in place to offset the fluctuations of economic activity in our economy. These include things like unemployment benefits, welfare, and progressive income taxes.
Automatic stabilizers are typical used to counter the effects of negative supply shocks or recessions. For example, if an economy falls into a recession we see an increase in unemployment benefits being given to help get the economy moving again and spending money which will ultimately cause an increase in aggregate demand.
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