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Built-in stability constitutes (one word), or "passive" or "automatic," budgetary policy.

Question

Built-in stability constitutes

(one word), or "passive" or "automatic," budgetary policy.

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Solution

The term you're looking for is "automatic stabilizers."

Automatic stabilizers are built-in stabilizing mechanisms within the economy that help mitigate fluctuations in economic activity without the need for explicit government intervention. They include features like progressive tax systems and social welfare programs such as unemployment benefits and food assistance.

During periods of economic downturns, automatic stabilizers kick in—more individuals qualify for benefits, and government expenditure increases without the need for new legislation. Conversely, in times of economic growth, tax revenues increase and fewer people require assistance, which helps cool off the economy. By providing a cushion against economic shocks, automatic stabilizers contribute to a more stable economic environment, making them a crucial element of passive or built-in budgetary policy.

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