Automatic stabilizers include:
A) Changes in the money supply that are initiated by the Fed.
B) Discretionary fiscal policy that must be determined by Congress.
C) Government spending changes that are triggered by the economy,not government decision-makers.
D) Supply-side policies that Congress and the president design to stimulate the economy.

Question

Quizplus · Accepted Answer

Automatic stabilizers refer to government policies that automatically adjust to changes in the economy without requiring explicit action by policymakers. These include changes in government spending (such as unemployment benefits or welfare payments) that increase during recessions or decreases during periods of economic growth, and changes in tax revenue (such as progressive income taxes) that increase during periods of economic growth or decrease during recessions. Automatic stabilizers are different from discretionary fiscal policy, which refers to deliberate changes in government spending or taxes aimed at stabilizing the economy in response to economic conditions. The other options listed are not examples of automatic stabilizers.

Automatic Stabilizers Include