An example of an automatic stabilizer is

Question

Quizplus · Accepted Answer

Unemployment compensation is an example of an automatic stabilizer because it provides income to workers who have lost their jobs due to economic downturns, thereby increasing their spending power and stimulating aggregate demand. This helps to offset the negative effects of a recession on output and employment levels. Conversely, during times of economic growth, the need for unemployment compensation decreases, reducing the government's spending on this program and helping to prevent inflationary pressures from building up in the economy.

An Example of an Automatic Stabilizer Is