Which factor is an automatic stabilizer?
A) military spending
B) unemployment compensation payments
C) disability payments to war veterans
D) Medicare payments

Question

Quizplus · Accepted Answer

Unemployment compensation payments are an automatic stabilizer because they increase during economic downturns when more people lose their jobs, and decrease during economic upturns when fewer people are unemployed. This helps to stabilize the economy by providing a safety net for those who lose their jobs and reducing the severity of recessions. The other options may be affected by government policy changes and are not automatic stabilizers.

Which Factor Is an Automatic Stabilizer