An automatic stabilizer

Question

Quizplus · Accepted Answer

An automatic stabilizer is a feature of the economy that helps to stabilize economic fluctuations without requiring any additional government action. It is triggered by the state of the economy, such as changes in national income or employment levels, rather than by any specific policy or action taken by the government. Examples of automatic stabilizers include unemployment insurance, which provides a safety net for workers who lose their jobs during a recession, and progressive income taxes, which automatically decrease during a recession as incomes fall. Therefore, options A, B, and D are incorrect.

An Automatic Stabilizer