All of the following are automatic fiscal stabilizers EXCEPT
A) a congressionally mandated decrease in tax rates to stimulate the economy.
B) a decrease in unemployment compensation payments during an expansion.
C) a decrease in overall tax revenues during a recession.
D) an increase in unemployment expenditures during a recession.

Question

Quizplus · Accepted Answer

Automatic fiscal stabilizers are government spending and taxation policies that automatically adjust to stabilize the economy without the need for additional government action. Option A suggests a congressionally mandated decrease in tax rates, which would require an active decision from the government and is not an automatic stabilizer. Options B, C, and D all involve automatic adjustment in spending and taxation based on economic conditions.

All of the Following Are Automatic Fiscal Stabilizers EXCEPT