Which of the following is NOT an automatic stabilizer?
A) a progressive income tax system
B) new legislation to increase tax rates
C) unemployment insurance
D) welfare programs

Question

Which of the following is NOT an automatic stabilizer?  
A) a progressive income tax system 
B) new legislation to increase tax rates 
C) unemployment insurance 
D) welfare programs

Quizplus · Accepted Answer

Automatic stabilizers are built-in features of an economy that automatically counteract economic fluctuations. Options A, C, and D are all automatic stabilizers as they all provide support to individuals or the economy during times of economic downturn. However, new legislation to increase tax rates is not an automatic stabilizer as it requires action from policymakers every time there is an economic downturn.

Which of the Following Is NOT an Automatic Stabilizer