The economic impact of automatic stabilizers during recessionary periods is to
A) increase unemployment.
B) increase taxes.
C) increase government spending.
D) decrease money growth.

Question

Quizplus · Accepted Answer

Automatic stabilizers, such as unemployment insurance and progressive income taxes, increase government spending and transfer payments and decrease tax revenues during recessionary periods. This helps to stimulate aggregate demand and stabilize the economy. Therefore, the best choice is C.

The Economic Impact of Automatic Stabilizers During Recessionary Periods Is