A major advantage of built-in or automatic stabilizers is that they
A) guarantee the federal budget will be balanced over the course of the business cycle.
B) require no Congressional action to be effective.
C) automatically produce surpluses during recessions and deficits during inflation.
D) require discretionary actions on the part of Congress before they exert an impact on output and employment.

Question

Quizplus · Accepted Answer

Built-in or automatic stabilizers are designed to kick in automatically during economic downturns or upturns without the need for additional Congressional action. This makes them an effective tool for stabilizing the economy without the delays and potential political gridlock that can arise from discretionary fiscal policy. Therefore, option (B) is the correct answer.

A Major Advantage of Built-In or Automatic Stabilizers Is That