Amazingly crisp, succinct and neat explanation to the concept of built-in stabilisers, cyclically adjusted budget surplus and cyclically adjusted budget deficit! You rock Jason!
Sir, you talked about that Automatic stabilizer do not have time lags . Time lags can be there for taxes revenue to increase or welfare measures to reach to last people in the economy. Am i right??
when AD shifts right, it’s because components of AD increases, when you talk about purchasing power, consumer’s purchasing power actually increases for the output to increase, this causes inflation, hence to reduce this, it should be contractionary fiscal/ monetary policy so output reduces, AD shifts left and prices eventually drops.
