Which of the following does not qualify as an automatic stabilizer in the economy?
A)Lump-sum taxes
B)Food stamps
C)Welfare payments
D)Progressive income taxes
E)Unemployment compensation

Question

Quizplus · Accepted Answer

Lump-sum taxes do not qualify as an automatic stabilizer because they do not vary with changes in economic activity. Automatic stabilizers, such as progressive income taxes, welfare payments, food stamps, and unemployment compensation, adjust automatically to changes in the economy, helping to stabilize aggregate demand and stabilize the overall economy.

Which of the Following Does Not Qualify as an Automatic