How Are Automatic Stabilizers Used To Combat Inflation?

Part I of Essay
? In today's economy, there are devices present called automatic stabilizers. Automatic stabilizers, are mechanisms which aid in the correction of an economic problem without the interference of anyone or anything. They are perhaps most useful to combat demand - pull infl ....

Part II of Essay
.... reducing the demand - pull inflation. Another way to stabilize demand - pull inflation is to reduce government spendings. Government spendings, are the spending that the government make with the tax revenues, and they add to the gross domestic product. An automatic stabilizer that will lower gross domestic product is welfare. As income rises, there are less people who need welfare, therefore reducing the amount of government spending, and lowering the gross domestic product. Due to such automatic stabilizers as progressive tax rates an ....