Automatic stabilizers include:
A) Unemployment benefits.
B) Open market operations.
C) Government deregulation.
D) Reserve requirements.

Question

Quizplus · Accepted Answer

Automatic stabilizers refer to government policies that automatically respond to economic changes without the need for additional legislative action. Unemployment benefits are a form of automatic stabilizer as they provide income support to those who lose their jobs during economic downturns, helping to stabilize aggregate demand by maintaining consumer spending levels. Options B, C, and D do not fall under the definition of automatic stabilizers as they either involve the central bank's monetary policy or changes in government regulations, which require specific actions by policymakers.

Automatic Stabilizers Include