Internal stabilizers, also known as Automatic stabilizers, refer to the automatic stabilizers in the financial system, when the economy is in recession or overheating, there is no need for the government to change economic policies, it would automatically act as a brake on a recession or an overheating economy.
According to the above definition, which of the following is the function of internal stabilizer?
The government increases the money supply when the economy is depressed, and reduces it when the economy is overheated, thus stabilizing the economy.