Automatic fiscal stabilizers refer to changes in government spending or taxing that occurs automatically as the business cycle changes. One example of an automatic fiscal policy stabilizer is an “induced tax”. Induced taxes refer to the amount of taxes collected as a percentage (i.e. income tax rate) of income. Incomes are positively related to GDP, implying that incomes rise during an economic boom. As incomes rise, the total amount of taxes collected by the government automatically increases. The increase in taxes paid by corporations and individuals tend to slow the economy. Increases in spending on defense or highways are examples of discretionary fiscal policy (requiring government Administration approval). The Federal Funds target rate is set by the Federal Reserve and is not an example of fiscal policy.