An 'Automatic Stabilizer' in macroeconomics refers to a discretionary fiscal policy tool that the government must actively vote on and pass during a recession to stimulate demand.

Answer: False

Automatic stabilizers are built-in features of the tax and transfer system that operate *without* any new legislative action. During a recession, tax revenues automatically fall (due to lower incomes) and welfare spending automatically rises (due to higher unemployment claims), naturally injecting demand into the economy. Conversely, they cool down an overheating economy without requiring active government intervention.