The Proportional Income Tax, acts as an __________, a shock absorber because it makes disposable income, and thus consumer spending purposes less sensitive to fluctuation in GDP. Option 1: Automatic stabiliser Option 2: Lender of the last resort Option 3: Banker to commercial bank Option 4: Open market operation

The answer is 'Automatic stabiliser'. View full solution:

CUET Economics - The Proportional Income Tax, acts as an __________, a shock absorber because it makes disposable income, and thus consumer spending purposes less sensitive to fluctuation in GDP. | PYQs + Solutions

CUET Economics 2026 15th May Shift 1

Macro

Easy

Automatic stabiliser

Lender of the last resort

Banker to commercial bank

Open market operation

✅ Correct Option: 1