Automatic stabilizers play an important role in helping the economy during tough times. Here’s how they work:
More Government Spending: When people lose their jobs, they receive unemployment benefits. This puts more money into the economy right when it's needed.
Changing Taxes: When the economy is struggling, people usually earn less money. That means they pay less in taxes, allowing them to keep more money to spend.
These steps help make the ups and downs of the economy more manageable. They can lessen the impact of recessions and help the economy bounce back!
Automatic stabilizers play an important role in helping the economy during tough times. Here’s how they work:
More Government Spending: When people lose their jobs, they receive unemployment benefits. This puts more money into the economy right when it's needed.
Changing Taxes: When the economy is struggling, people usually earn less money. That means they pay less in taxes, allowing them to keep more money to spend.
These steps help make the ups and downs of the economy more manageable. They can lessen the impact of recessions and help the economy bounce back!