Automatic stabilizers are
A) provisions that cause changes in government spending and taxes without new action by Congress or the President.
B) policies set by certain committees in Congress.
C) tools used by the President's Council of Economic Advisers.
D) provisions that cause the aggregate supply curve to be upward sloping.

Question

Quizplus · Accepted Answer

Automatic stabilizers are provisions in the tax system and welfare programs that automatically kick in during times of economic downturns, increasing government spending and decreasing taxes without requiring new action by Congress or the President. Examples include unemployment benefits, which increase as more people become unemployed, and progressive income taxes, which automatically decrease as people's incomes decline.

Automatic Stabilizers Are