Final answer:
The progressive income tax is an automatic stabilizer that helps to moderate economic fluctuations by adjusting tax payments based on individuals' income levels.
Step-by-step explanation:
The progressive income tax serves as an automatic stabilizer in the economy. Automatic stabilizers are economic policies and programs designed to offset fluctuations in a nation's economic activity without additional intervention by the government or policymakers. The progressive income tax automatically adjusts as individuals' income levels change; during an economic downturn, individuals earn less, resulting in lower tax payments, while during economic expansions, higher earnings lead to higher tax payments. This mechanism helps to moderate the swings in aggregate demand by providing more disposable income during downturns, and by pulling out some money from circulation during ups. Hence, it serves to stabilize the economy.