When government tax revenues change automatically and in a countercyclical direction over the course of the business cycle, this is an example of:

a. impouding
b. built-in stability
c. money creation
d. the full-employment budget

Take a shot.

the full employment budget

the full-employment budget

To answer this question, we need to review the options provided.

a. Impounding refers to the act of seizing or taking control of something, typically by a government authority, usually in relation to financial matters. This does not relate to the given scenario.

b. Built-in stability is the concept that refers to automatic changes in government tax revenues and expenditures that act as stabilizers for the economy. It is designed to counterbalance fluctuations in economic activity over the business cycle. This option aligns with the scenario mentioned.

c. Money creation refers to the process by which the money supply in an economy is increased, typically through actions taken by central banks, such as printing more money or expanding the money supply electronically. This does not relate to the given scenario.

d. The full-employment budget is a concept that measures the impact of fiscal policies on the economy, focusing on the budget deficit or surplus that exists when the economy is at full employment. This concept is not directly related to the given scenario.

Based on the explanation above, the correct answer is: b. built-in stability.