Which of the following would not be considered an automatic stabilizer?
A)legislation increasing funding for job retraining passed during a recession
B)decreasing unemployment insurance payments due to decreased joblessness during an expansion
C)rising income tax collections due to rising incomes during an expansion
D)declining food stamp payments due to more persons finding jobs during an expansion

Question

Quizplus · Accepted Answer

Automatic stabilizers are policies or programs that automatically help stabilize the economy during economic fluctuations without the need for new government actions or policies. Choice A is an example of a discretionary fiscal policy (legislation increasing funding for job retraining passed during a recession), which is not considered an automatic stabilizer. The other options (B, C, and D) are examples of automatic stabilizers, as they automatically adjust during economic fluctuations without the need for new government actions or policies.

Which of the Following Would Not Be Considered an Automatic