Which of the following would not be considered an automatic stabilizer?
A)Welfare payments
B)Unemployment compensation
C)Income tax
D)Defense spending

Question

Quizplus · Accepted Answer

Automatic stabilizers are economic policies and programs designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers. Defense spending is not considered an automatic stabilizer because it does not automatically adjust with the economic cycle; instead, it is determined by government budget decisions and policy, independent of the current state of the economy. In contrast, welfare payments, unemployment compensation, and income taxes automatically adjust with the level of economic activity, helping to stabilize the economy.

Which of the Following Would Not Be Considered an Automatic