Don’t know abut the “Automatic” part, but there are several options for a test site.
You can export from an existing WordPress blog and import into another WordPress blog from the Dashboard. Tools: Import / Export.
Test site: You can set up a Test Site on your desktop PC using xampp, there are instructions here somewhere, sorry don’t have the links. I have a test site on my PC – easier to make changes since files don’t need to be uploaded. Down side, others can’t see the site if you want someone else to give feedback.
You can set up a second install in it’s own folder on your main site. Set the search engine settings, Dashboard: Settings: Privacy Settings: Keep search engines out so the search engines will not crawl the Test Site. I also have one of these on my site. Advantage: I can send a link to someone when I want them to see something on the Test Site. Disadvantage: when I make changes I need to upload the changed files. (I guess there are ways to edit the files on the Site but I have not tried that yet)
If you are just doing development work I would think that as long as your data (posts, pages etc) was representative of real data that the test data might not need to be up to date but you would still have the look, feel and functions of the new changes and things would work fine. There are probably easy ways to clear your database if you needed to upload fresh test data.
Some of the Moderators have mentioned having up to around 6 or so test sites set up on and off the web so they should have more ideas for you.
good luck