An example of an automatic stabilizer is
A)consumer spending.
B)inflation.
C)unemployment insurance.
D)discretionary fiscal policy.

Question

Quizplus · Accepted Answer

Unemployment insurance is an example of an automatic stabilizer because it provides income support to individuals who have lost their jobs during an economic downturn, helping to stabilize their purchasing power and overall demand in the economy. As unemployment increases during a recession, more individuals are eligible for these benefits, which automatically increases government spending and helps offset the decline in consumer spending.

An Example of an Automatic Stabilizer Is