If it were not for the automatic stabilizers in the U.S.economy,
A)the Federal Reserve would have less reason than it has now to monitor stock prices.
B)it would be more desirable than it is now for the Federal Reserve to target an interest rate.
C)a strict balanced-budget rule would be more desirable than it is now.
D)output and employment would probably be more volatile than they are now.

Question

Quizplus · Accepted Answer

Automatic stabilizers, such as unemployment insurance and progressive taxation, help to cushion the impact of economic downturns and stabilize output and employment. Without these stabilizers, the economy would be more susceptible to volatility and fluctuations. Therefore, D is the best choice. A, B, and C are not necessarily true statements and do not relate directly to the role of automatic stabilizers in the economy.

If It Were Not for the Automatic Stabilizers in the U.S.economy