Government programs that automatically shift the government budget toward a deficit during recessions and a surplus during recoveries are called
A) discretionary fiscal policy.
B) automatic stabilizers.
C) progressive taxation.
D) price deflators.

Question

Quizplus · Accepted Answer

Automatic stabilizers are government programs that automatically shift the government budget toward a deficit during recessions and a surplus during recoveries. These programs include unemployment insurance, progressive taxation, and welfare programs. They help to stabilize the economy by providing a cushion for those who have lost their jobs or are experiencing economic hardship, which in turn helps to maintain consumer spending and demand in the economy.

Government Programs That Automatically Shift the Government Budget Toward a Deficit