Option 1 -> Discretionary fiscal policy involves deliberate government actions to change spending or taxes, not automatic adjustments.
Option 2 -> Government expenditure multiplier measures the impact of government spending changes on GDP, not a stabilization mechanism.
Option 3 -> Automatic stabilisers are built-in mechanisms that automatically adjust to cushion the economy without policy changes.
Option 4 -> Tax multiplier measures how tax changes affect GDP, it's a coefficient not a shock absorber.
Hence, Option 3: Automatic stabiliser -> Automatic stabilisers are economic mechanisms like progressive taxes and unemployment benefits that work automatically without government intervention. When GDP falls, tax collections decrease and transfer payments increase, protecting disposable income. When GDP rises, taxes increase and benefits decrease, preventing overheating. This automatic adjustment makes consumer spending less volatile and stabilizes the economy-> correct