If the economy falls into a recession, which of the following responses constitutes the use of an automatic stabilizer?

Question

Quizplus · Accepted Answer

Automatic stabilizers are policies already built into the economy that automatically stabilize it when it falls into a recession. For example, an existing system that directs government payments to unemployed workers is an automatic stabilizer because it does not require any new legislation or government action. Option A is not an automatic stabilizer since it requires Congress to vote on and the President to sign a new law. Option B is also not an automatic stabilizer because it is a new program that requires new funding and legislation, and would take time to implement.

If the Economy Falls into a Recession, Which of the Following