Automatic stabilizer
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Automatic stabilizer is a tax and spending rule that have the effect of increasing aggregate demand when the economy slows down and restraining aggregate demand when the economy speeds up, without any additional change in legislation.
Definition
According to Principles of Economics by Timothy Taylor (3rd edition),
- Automatic stabilizer. Tax and spending rule that have the effect of increasing aggregate demand when the economy slows down and restraining aggregate demand when the economy speeds up, without any additional change in legislation.
