An automatic stabilizer is a device that automatically adjusts the control system of a vehicle to maintain stability and balance. It electronically senses the vehicle’s movements and uses actuators to counteract destabilizing forces.
What is an automatic stabilizer?
It’s a policy that automatically adjusts to stabilize the economy, like unemployment benefits or progressive taxes, without government intervention.
What is the best example of an automatic stabilizer?
Unemployment benefits. When more people lose jobs, benefits increase automatically, supporting income and spending.
What is the main advantage of an automatic stabilizer?
It reacts immediately to economic changes, reducing the impact of recessions without needing new policies.
What is a disadvantage of automatic stabilizers?
They can increase government debt during downturns as more people rely on benefits.
What are automatic stabilizers in the Indian economy?
Progressive taxes and welfare programs like MGNREGA, which provide income during tough economic times.
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