Which of the following is the best example of an automatic stabilizer?
A) a balanced federal budget
B) the minimum wage
C) unemployment compensation program
D) discretionary fiscal policy

Question

Quizplus · Accepted Answer

Unemployment compensation program is the best example of an automatic stabilizer because it automatically increases during a recession when more people are unemployed and decreases during economic expansion. This helps to stabilize the economy by providing income to those who have lost their jobs and increasing consumer spending. A balanced federal budget and discretionary fiscal policy are not automatic stabilizers as they require conscious decision-making by policymakers. The minimum wage can have an impact on the economy, but it is not an automatic stabilizer.

Which of the Following Is the Best Example of an Automatic