Which one of the following functions as an automatic stabilizer in the context of fiscal and monetar...........

Indian Economic System Budgeting and Fiscal policy

Which one of the following functions as an automatic stabilizer in the context of fiscal and monetary policies of an economy?

This questions was previously asked in

CAPF 2021 Paper-1

Personal income tax

Reverse repo rate of bank

Open market operation

Bond price

Personal income tax .

The most important automatic stabilizer is the tax system.
A common example of automatic stabilizers is corporate and personal income taxes that are progressively graduated, which means that they are fixed in proportion to the income levels of the taxpayer.

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