What are automatic stabilizers?
A)Imports and exports that automatically change with the state of the economy so as to stabilize the economy.
B)Investment spending which automatically changes with the state of the economy so as to stabilize the economy.
C)Tax provisions and government spending programmes that automatically put money into the economy in a recessionary period and take it out in a boom period.
D)Consumption spending which automatically changes with the state of the economy so as to stabilize the economy.

Question

Quizplus · Accepted Answer

Automatic stabilizers refer to tax and government spending policies that automatically adjust in response to changes in the level of economic activity, without requiring explicit action by policymakers. Such policies help stabilize the economy by injecting money during recessions and reducing spending during economic booms. Examples of automatic stabilizers include unemployment insurance, progressive income taxes, and welfare programs.

What Are Automatic Stabilizers