Which statement(s) is/are TRUE? I. Automatic stabilizers require overt action by Congress or other policymakers to implement.
II) Discretionary increases in government spending are classified as automatic stabilizers.
III) When the economy is growing, tax receipts increase and transfer payments decrease, helping to automatically stabilize the economy by preventing it from growing too fast.
A) I only
B) II only
C) III only
D) I, II, and III

Question

Quizplus · Accepted Answer

Automatic stabilizers are built into the government's revenue and spending policies and are not dependent on overt action by policymakers to implement. Discretionary increases in government spending are not considered automatic stabilizers. When the economy is growing, tax receipts increase and transfer payments decrease, which helps to automatically stabilize the economy by preventing it from growing too fast. Therefore, statement III is true.

Which Statement(s) Is/are TRUE? I