The Economic Stabilizer, Automatic Stabilizer is preventing from securing the nation from serious consequence that is caused with increase in recession.
The scenario is: If the individual tax is high in wages as well as in income, it is suggested for high tax rate, and hence there occurs an imbalanced level in the economic growth. For this purpose, the Stabilizers are used. Multiple defects are possible by this process and it takes place due to the GDP, income immediately. In this case, Automatic Stabilizer is used to reduce the fluctuation in the current GDP of a nation. The stabilizer’s size and effectiveness is calculated by the outcome’s references. It is independent from the variables calculated from the fiscal policy.
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