💸 Unit 1: Basic Economic Concepts
1.2Opportunity Cost and the Production Possibilities Curve (PPC)
1.3Comparative Advantage and Trade
📈 Unit 2: Economic Indicators and the Business Cycle
2.1Circular Flow and GDP
2.6Real vs Nominal GDP
💲 Unit 3: National Income and Price Determination
3.5Equilibrium in Aggregate Demand-Aggregate Supply (AD-AS) Model
💰 Unit 4: Financial Sector
4.3Definition, Measurement, and Functions of Money
4.4Banking and the Expansion of the Money Supply
⚖️ Unit 5: Long-Run Consequences of Stabilization Policies
5.1Fiscal and Monetary Policy Actions in the Short-Run
5.3Money Growth and Inflation
5.4Deficits and the National Debt
🏗 Unit 6: Open Economy-International Trade and Finance
6.1Balance of Payments Accounts
6.4Effect of Changes in Policies & Economic Conditions on the Foreign Exchange Market
⏱️ 1 min read
November 15, 2020
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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