Automatic stabilizers in Fiscal Policy

econclassroom.com
Fiscal policy is a great tool for managing the level of aggregate demand and promoting a country's macroeconomic objectives. However, it can take months or longer for elected officials to decide on a course of action following a recession or inflation. Good thing there are automatic stabilizers built into most governments' budgets! This video explains and illustrates how automatic stabilizers built into fiscal policy can soften the shocks caused by fluctuations in a country's business cycle.

[@subrotochatterjee5788]

Amazingly crisp, succinct and neat explanation to the concept of built-in stabilisers, cyclically adjusted budget surplus and cyclically adjusted budget deficit! You rock Jason!

[@nibonteninyeo4423]

Your course is best i have ever seen on economics. Think you so much for teaching us!

[@planetgaming8256]

Hiya, would the Government Budget be good to show in the real exam? (although i understand its not necessary)

[@tarunpawar1424]

Thanks for the explanation...

[@manishapatekar7157]

Sir, you talked about that Automatic stabilizer do not have time lags . Time lags can be there for taxes revenue to increase or welfare measures to reach to last people in the economy. Am i right??

[@joaodomingos818]

What software/device is being used? Please, I really want to know.

[@sreekanth7180]

Microsoft OneNote I think

[@adityaraj9137]

Goverment spending on welfare is included in transfer payments, so won't directly increase the G component of AD?

[@Priyotamchakma064]

thanks

[@camscam837]

thank u!!

[@nataliep.9376]

THANKSS

[@s_aydemir5571]

When AD shifts rightwards and there is inflation problem, isn't government supposed to support people as their purchasing power decreased ?

[@MichaelA-jq1uz]

income is also increasing

[@haboianrebecca4841]

when AD shifts right, it’s because components of AD increases, when you talk about purchasing power, consumer’s purchasing power actually increases for the output to increase, this causes inflation, hence to reduce this, it should be contractionary fiscal/ monetary policy so output reduces, AD shifts left and prices eventually drops.

[@rosaikun1504]

B,u,,kipu,,