In a recession,some aspects of fiscal policy can stimulate aggregate demand without deliberate actions of policymakers.This occurs as a result of:
A) crowding out.
B) the multiplier effect.
C) automatic stabilizers.
D) Ricardian equivalence.

Question

Quizplus · Accepted Answer

Automatic stabilizers refer to programs and policies that automatically stimulate aggregate demand without deliberate actions from policymakers during a recession. Examples of automatic stabilizers include unemployment benefits and progressive income tax systems. These stabilizers help to reduce the severity of a recession without any intentional action from policymakers.

In a Recession,some Aspects of Fiscal Policy Can Stimulate Aggregate