One characteristic of automatic stabilizers is that
A) they require no new legislative action by the government to have an effect.
B) they automatically produce surpluses during recessions and deficits during inflation.
C) they have no effect on the distribution of income.
D) they reduce the size of the public debt during times of recession.

Question

Quizplus · Accepted Answer

Automatic stabilizers are economic policies and programs designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers. They work automatically and require no new legislative action by the government to have an effect. For example, during a recession, automatic stabilizers like unemployment insurance and progressive income tax reduce the budget deficit and stimulate economic activity.

One Characteristic of Automatic Stabilizers Is That