Which provides an automatic stabilizer when the economy is declining?
A) money supply
B) government bonds
C) regressive tax system
D) welfare and transfer programs

Question

Quizplus · Accepted Answer

Welfare and transfer programs provide an automatic stabilizer when the economy is declining. During an economic downturn, more individuals may qualify for these programs and receive financial assistance, which can help boost consumer spending and stimulate the economy. Additionally, these programs can reduce the severity of the economic decline by providing a safety net for those who may otherwise experience significant hardship. The other options listed (money supply, government bonds, and regressive tax system) do not necessarily provide automatic stabilizers during an economic decline.

Which Provides an Automatic Stabilizer When the Economy Is Declining