An example of an automatic stabilizer is
A)unemployment benefits.
B)a lowering of interest rates by the Fed.
C)a decrease in money demand.
D)a decrease in tax rates in response to a recession.

Question

Quizplus · Accepted Answer

Unemployment benefits automatically increase when the economy enters a recession, providing individuals with income when they lose their jobs. This helps to stabilize the economy by maintaining consumer spending without the need for new legislation.

An Example of an Automatic Stabilizer Is