Which of the following would not act as an automatic stabilizer?
A)Unemployment insurance
B)Government purchases
C)Personal income taxes
D)Corporate income taxes

Question

Quizplus · Accepted Answer

Automatic stabilizers are government policies that automatically help stabilize the economy during a recession without additional government action. Unemployment insurance and personal income taxes act as automatic stabilizers by reducing the negative effects of a recession on household income. Corporate income taxes, on the other hand, do not directly affect households and therefore do not act as automatic stabilizers. Government purchases may provide temporary economic stimulus, but they require additional government action and do not operate automatically.

Which of the Following Would Not Act as an Automatic