The correct option is: e. A downturn in the economy results in an increase in unemployment benefits received by persons in that economy.
Automatic stabilizers are a type of fiscal policy designed to offset fluctuations in a nation's economic activity through their normal operation without additional, timely authorization by the government or policymakers.
The correct answer to the question is c. Discretionary fiscal policy aims at uplifting the economy by either tax cuts or reducing the government... See full answer below.
Two examples of automatic stabilizers are unemployment insurance payments, which increase during a recession as more workers become unemployed, and income taxes, which decrease during a recession as incomes fall.
The best example of automatic stabilizers are: Progressively increasing corporate income taxes. Gradually increasing personal income taxes. Unemployment insurance collected by employed workers.
C. An example of an automatic stabilizer is unemployment benefits. During recessions the economy experiences insufficient aggregate demand, the unemployment benefits help to increase aggregate demand.
Which of the following is an example of a government fiscal policy? The government recently reduced corporate tax rates. Fiscal policy involves changes in taxes or spending (government budget) to achieve economic goals. Changing the corporate tax rate would be an example of fiscal policy.
The two major examples of expansionary fiscal policy are tax cuts and increased government spending. Both of these policies are intended to increase aggregate demand while contributing to deficits or drawing down budget surpluses.
Discretionary fiscal policy is a policy action aimed at stabilizing the business cycle. Examples include changes in government spending and changes in taxes levied.
Which of the following is not an example of an automatic stabilizer? welfare reform makes it more difficult to receive welfare even when the economy enters a recession. Welfare reform requires deliberate legislative action; therefore, it is not an automatic stabilizer.
Defense spending is not considered as an automatic stabilizer since the expenditure made on the defense system is not considered an economic problem.
automatic stabilizers are. economic policies and programs designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers on an individual basis.