How Are Automatic Stabilizers Used To Combat Inflation?
Beginning of paper
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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 inflation. Demand - pull inf ....
Middle of paper
.... demand will
not be as high above, or even above where the supply is, therefore 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 amou ....
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Word count: 386
Page count: 2 (approximately 250 words per page)
