An advantage of automatic stabilizers over discretionary fiscal policy is that
A) automatic stabilizers are not subject to the same time lags as discretionary fiscal policy.
B) automatic stabilizers can be easily fine-tuned to move the economy to full employment.
C) only policymakers are involved in implementing automatic stabilizers.
D) the Ricardian equivalence theorem applies more readily to automatic stabilizers than to discretionary fiscal policy.

Question

Quizplus · Accepted Answer

Automatic stabilizers do not require any legislative action, unlike discretionary fiscal policy, which requires Congress to pass new laws. As a result, automatic stabilizers are not subject to the same time lags as discretionary fiscal policy, which can take months or even years to implement. Because the effects of automatic stabilizers are automatic and immediate, they can help reduce the severity of economic downturns without the need for policymakers to take specific action.

An Advantage of Automatic Stabilizers Over Discretionary Fiscal Policy Is