An example of an automatic stabilizer is
A)unemployment compensation.
B)a newly enacted surtax to slow down an overheated economy.
C)a horizontal aggregate supply curve.
D)a change in the marginal tax rates.

Question

Quizplus · Accepted Answer

Unemployment compensation is an example of an automatic stabilizer because it increases during economic downturns and decreases during economic upturns. This means that it helps to stabilize the economy without any government intervention.

An Example of an Automatic Stabilizer Is