Which of the following is true?
A)Automatic stabilizers are used to eliminate recessions.
B)Discretionary fiscal policy cannot eliminate a recession.
C)Automatic stabilizers help to reduce the impact of a recession.
D)Discretionary fiscal policy can automatically eliminate a recession.
E)Automatic stabilizers make discretionary policy more effective by increasing the magnitude of the multipliers.

Question

Quizplus · Accepted Answer

Automatic stabilizers are built-in features of the economy that help to reduce the impact of recessions without the need for explicit government action. Examples of automatic stabilizers include unemployment insurance and progressive taxation, which both increase during a recession and help to support consumer spending. While discretionary fiscal policy can be used to help stabilize the economy, it is not always effective and can be subject to political pressures and delays.

Which of the Following Is True