Which of the following is not an automatic stabilizer? A. Unemployment compensation. B. Defense spending. C. Progressive income tax rates (that is, higher marginal tax rates that rise with income). D. All of the answers are automatic stabilizers
Added by Phillip E.
Step 1
Unemployment compensation is an automatic stabilizer because it provides financial support to individuals who lose their jobs, helping to maintain their spending and stabilize the economy during a downturn. B. Defense spending is not an automatic stabilizer Show more…
Show all steps
Your feedback will help us improve your experience
Haricharan Gupta and 81 other Macroeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Automatic stabilizers can do which of the following? A. Offset the destabilizing influence of changes in tax revenues. B. Aid the economy in moving away from the full-employment output level. C. Allow policymakers to formulate a set of rules flexible and comprehensive enough to eliminate discretionary actions. D. Cause tax revenues to decrease when GDP decreases and to increase when GDP increases. E. Allow policymakers to prescribe public works programs during inflationary periods because expenditures for unemployment and welfare have correspondingly decreased.
Andrew D.
Which statement below is NOT true regarding government intervention in the economy? Progressive income tax is a form of automatic stabilizer. If the economy is doing badly, the government should cut spending to improve it. Most suggest that government should promote macroeconomic stability. Unemployment insurance is an automatic economic stabilizer.
Jonathan T.
Which of the following is an automatic stabiliser? interest rate progressive income tax. business tax. government expenditure.
Aparna S.
Recommended Textbooks
Principles of Economics
Macroeconomics
Economics
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD