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Which of the following is an example of an automatic stabilizer?
Practice Questions
Q1
Which of the following is an example of an automatic stabilizer?
Government infrastructure projects
Unemployment benefits
Tax cuts
Public investment programs
Questions & Step-by-Step Solutions
Which of the following is an example of an automatic stabilizer?
Steps
Concepts
Step 1: Understand what an automatic stabilizer is. It is a government policy that automatically helps the economy without needing new laws.
Step 2: Identify examples of automatic stabilizers. Common examples include unemployment benefits and progressive taxes.
Step 3: Focus on unemployment benefits. These benefits increase when more people lose their jobs during a recession.
Step 4: Conclude that unemployment benefits help support individuals financially during tough economic times, making them an automatic stabilizer.
No concepts available.
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