A major advantage of automatic stabilizers is that they:
A)simultaneously stabilize the economy and tend to reduce the absolute size of the public debt
B)automatically produce surpluses during recessions and deficits during inflation
C)require no legislative action by Parliament to be made effective
D)guarantee that the federal budget will be balanced over the course of the business cycle
E)guarantee that the federal budget will be balanced each year

Question

Quizplus · Accepted Answer

Automatic stabilizers are government spending and taxation policies that automatically adjust in response to changes in the economy. They do not require legislative action to be made effective, and can help stabilize the economy without the need for discretionary policy action.

A Major Advantage of Automatic Stabilizers Is That They