ECON102: Principles of Macroeconomics

Watch this lecture for a discussion of fiscal policy and automatic stabilizers. Discretionary fiscal policy is how the executive and legislative branches exercise their choice of increasing or decreasing taxes or spending to attain economic stability. Automatic stabilizers are the non-discretionary occurrences that mitigate fluctuations in GDP. When that happens, the government automatically gains increases in revenues as a consequence of economic expansions.