An 'Automatic Stabilizer' is a discretionary fiscal policy tool that requires the Parliament to pass a new emergency bill every time the economy enters a recession to stimulate demand.

Answer: False

Automatic stabilizers are built-in, non-discretionary features of the tax and welfare system that operate automatically without any new legislative action. For example, during a recession, corporate profits and incomes fall, causing tax revenues to automatically drop, while unemployment claims rise, causing welfare spending to automatically increase. This naturally injects demand into the economy, softening the blow of the recession.