The presence of automatic stabilizers in an economy suggest that _____.
A) the time lags in implementing ﬁscal policy are likely to be long
B) in a recession, tax receipts will increase
C) the government need not use ﬁscal policy to monitor economic activity
D) structural deﬁcits in an economy are likely to be very high

Question

Quizplus · Accepted Answer

Automatic stabilizers, such as unemployment benefits and progressive taxation, automatically adjust to changes in economic conditions without the need for explicit government intervention, reducing the need for active fiscal policy adjustments to monitor economic activity.

The Presence of Automatic Stabilizers in an Economy Suggest That