Explain What Is Meant by Automatic Stabilizers and How They

question 46

Essay

Explain what is meant by automatic stabilizers and how they work to minimize fluctuations in economic activity.

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Definitions:

Reinvesting Dividends

The process of using dividend payments to purchase more shares of the same stock.

Declaration Date

The date on which a company's board of directors announces its next dividend payment.

Board of Directors

A group of individuals elected by shareholders to oversee the management and major decisions of a corporation.

Dividend Payment

The distribution of a portion of a company's earnings to its shareholders, usually in the form of cash or additional stock.