An advantage of automatic stabilizers over discretionary fiscal policy is that
A)automatic stabilizers are not subject to the same time lags as discretionary fiscal policy.
B)automatic stabilizers can be easily fine-tuned to move the economy to full employment.
C)only the President is involved in implementing automatic stabilizers, instead of both the President and Congress.
D)the Ricardian equivalence theorem applies more readily to automatic stabilizers than to discretionary fiscal policy.

Question

Quizplus · Accepted Answer

Automatic stabilizers are built into the economy and do not require legislative action to activate. They kick in automatically during economic downturns, such as higher unemployment benefits, and during times of economic expansion, taxes collected by the government will rise. Thus, they do not suffer from the same time lags as discretionary fiscal policy, which requires legislative action before enacting changes.

An Advantage of Automatic Stabilizers Over Discretionary Fiscal Policy Is