Automatic fiscal stabilizers are most helpful in
A)making discretionary fiscal policy effective.
B)removing persistent output gaps.
C)promoting economic growth.
D)eliminating price fluctuations in the economy.
E)reducing the intensity of business cycles.

Question

Quizplus · Accepted Answer

Automatic fiscal stabilizers, such as unemployment insurance and progressive taxation, work automatically to reduce the severity of economic downturns and soften the impact of business cycles. They do not necessarily eliminate output gaps or promote growth, but they can help to stabilize the economy by providing a safety net for individuals during times of economic hardship.

Automatic Fiscal Stabilizers Are Most Helpful in