Which of the following is an example of an automatic stabiliser?The regressive tax systemThe progressive tax systemPensionsThe proportional tax system

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Solution 1

The progressive tax system and pensions are examples of automatic stabilisers.

Here's why:

The Progressive Tax System: This is a type of taxation that taxes higher income brackets at higher rates. When the economy is doing well, people earn more and thus pay more taxes. Conversely, during a do Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.

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Fiscal policy is NOT often used as a stabilisation tool. However, it does have important roles in the economy. Three of these roles are:

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