Changes to taxes and spending that occur without any direct action by the government are called

Changes to taxes and spending that occur without any direct action by the government are referred to as automatic stabilizers. These are fiscal mechanisms that automatically adjust government spending and taxation in response to changes in economic conditions, helping to stabilize the economy without the need for explicit legislative action.

For example, during economic downturns, unemployment benefits increase as more people become eligible, leading to higher government spending. Similarly, tax revenues tend to decrease automatically during recessions because individuals and businesses earn less income. This automatic adjustment helps to cushion the economy from further decline by sustaining consumer spending.

Automatic stabilizers play an essential role in maintaining economic stability and are considered a key feature of a well-functioning fiscal policy system. Overall, they contribute to smoother economic cycles, reducing the volatility caused by external shocks.